N. S. Kannan - Executive Director and CFO: Good evening all of you. Welcome to the conference call on the financial results of ICICI Bank for the quarter ended March 31, 2013, which is the fourth quarter of the current financial year, that is, Q4 of 2013.
As always, as always, my remarks this evening would revolve around four key themes. First, we'll talk about the domestic macro-economic and monetary environment; that will be followed by, our performance during the quarter, including performance on our 5Cs strategy.
Then, we'll move on to our consolidated results; and finally, the outlook for the full financial year 2014.
Let me start with the first part on the macroeconomic and monetary environment during the fourth quarter.
Indicators of real economic activity continued to reflect moderation in growth. The growth in the index of industrial production that is IIP continued to remain volatile with 2.4% growth in January 2013 followed by a growth of 0.6% in February 2013.
Cumulative growth in IIP during April 2012 to February 2013 was 0.9% compared to 3.5% in April 2011 to February 2012 period. GDP growth for the nine months ended December 2012 was 5%, with moderation seen across all key sectors.
Export growth turned positive from January 2013 recording a growth of 4.1% in Q4 of 2013 compared to a decline of 3.6% in Q3 2013. Imports grew by 2% during Q4 compared to a growth of 7.1% in Q3, with the lower growth being driven by lower value of gold and oil imports, while non-oil imports continued to decline. The trade deficit stood at $191 billion during fiscal 2013 compared to $183 billion in fiscal 2012. The rupee appreciated marginally during the quarter from INR54.8 per U.S. dollar at end December 2012 to INR54.4 per U.S. dollar at the end of March 2013.
Inflation trends showed continued moderation during the fourth quarter, with wholesale price index based inflation declining from 7.3% in December 2012 to 6% in March 2013. This was primarily due to a consistent moderation in manufactured products inflation which eased from 5% in December 2012 to 4.1% in March 2013.
Core inflation moderated from 4.3% in December to 3.4% in March 2013, the lowest level since March of 2010. Fuel inflation remained high due to the increase in diesel prices while food inflation eased during the quarter. The average inflation for financial year 2013 was 7.3% compared to 8.9% in financial year 2012.
Systemic liquidity remained tight during the fourth quarter with average daily borrowing by banks under the liquidity adjustment facility LAF window increasing to about INR995 billion compared to INR937 billion during the previous quarter. This was partly due to lower government spending during the quarter.
The Reserve Bank of India provided liquidity support by way of Open Market Operations and government securities of about INR335.48 billion and a reduction in cash reserve ratio by 25 basis points to 4%. As a result of tightening liquidity, interest rates on market instruments like Commercial Papers and Certificate of deposits increased during the fourth quarter. The yield on the 10-year benchmark government securities remained stable at 8% at end of March 2013.