ICICI Bank (Q3 FY13)

India Infoline News Service | Mumbai |

Impressive NIM performance continues; margin to stabilize from hereon

CMP Rs1,191, Target Rs1,350, Upside 13.4% 
  • Loan growth in line with expectations; domestic book grows by 20%
  • Impressive NIM performance continues; margin to stabilize from hereon
  • Core fee income continues to be weak; C/I ratio declines on higher treasury income
  • Asset quality improves; outlook remains benign
  • Capital adequacy robust; strong RoA delivery continues
  • Valuation re-rating to continue; 9-month target price Rs1,350 
Result table (Standalone)
(Rs mn) Q3 FY13 Q2 FY13 % qoq Q3 FY12 % yoy
Total Interest Income 101,383 100,263 1.1 85,919 18.0
Interest expended (66,393) (66,551) (0.2) (58,799) 12.9
Net Interest Income 34,990 33,712 3.8 27,120 29.0
Other income 22,150 20,430 8.4 18,919 17.1
Total Income 57,140 54,142 5.5 46,039 24.1
Operating expenses (22,612) (22,209) 1.8 (19,168) 18.0
Provisions (3,687) (5,079) (27.4) (3,411) 8.1
PBT 30,841 26,854 14.8 23,460 31.5
Tax (8,335) (7,293) 14.3 (6,179) 34.9
Reported PAT 22,506 19,561 15.1 17,281 30.2
EPS 78.1 67.9 15.0 60.0 30.1


(Rs bn) Q3 FY13 Q2 FY13 % qoq Q3 FY12 % yoy
Loans    2,868   2,751   4.2   2,462   16.5
Deposits   2,864   2,814   1.8   2,606   9.9
LDR (%)   100.1   97.7   2.4   94.5   5.7
Total assets   5,273   4,971   6.1   4,593   14.8


(Rs mn) Q2 FY13 Q1 FY13 chg qoq Q2 FY12 chg yoy
NIM (%) 3.1 3.0 0.1 2.7 0.4
CASA (%) 40.9 40.7 0.2 43.6 (2.7)
C/D (%) 100.1 97.7 2.4 94.5 5.7
Non-interest income (%) 38.8 37.7 1.0 41.1 (2.3)
Cost to Income (%) 39.6 41.0 (1.4) 41.6 (2.1)
Provisions/Income (%) 6.5 9.4 (2.9) 7.4 (1.0)
BV (Rs) 581.9 559.0 22.9 529.0 52.9
RoE (%) 14.1 12.7 1.3 11.9 2.2
RoA (%) 1.8 1.7 0.2 1.6 0.2
CAR (%) 19.5 18.3 1.2 18.9 0.6
Gross NPA (%) 3.3 3.5 (0.2) 3.8 (0.5)
Net NPA (%) 0.8 0.8 (0.0) 0.8 (0.1)
Source: Company, India Infoline Research; * Computed by us

Loan growth in line with expectations; domestic book grows by 20%

ICICI Bank’s domestic corporate loan book continued to grow at strong pace of 27% driven partially by short term loans to highly-rated corporate customers. A sharp decline in wholesale funding rates and relatively better pricing environment has been driving the significant expansion in this book since March 2012. Retail loan growth improved further to 17% yoy (14% yoy in Q2 and 10% yoy in Q1) aided by brisk growth in mortgages (19% yoy), auto loans (32.5% yoy) and unsecured products (personal loans and credit cards portfolio was up 24% qoq and 7% qoq respectively). ICICI Bank’s market share in home and auto loans is improving and the bank has started to grow its unsecured portfolio moderately by leveraging existing customer base. The bank remains cautious in the SME segment (book up 4% qoq and 24% yoy) due to higher delinquencies witnessed.


CASA ratio stable; could likely have bottomed out

Deposits growth was muted at 2% qoq/10% yoy pushing the C/D ratio higher by 200bps. CASA both on quarter-end and average basis was sequentially stable at 40.9% and 37.4% respectively. Savings deposits growth decelerated to 11% yoy from 15% yoy in the previous quarter reducing its share in deposits to 28.4%; current account balances were higher 5% qoq. Though the bank is seeing substantial new account additions, a material improvement in the savings ratio would hinge on decline in term deposits rates. Bank is confident of maintaining daily average CASA in the range of 38-40%.


Impressive NIM performance continues; margin to stabilize from hereon

As expected, ICICI Bank’s NIM improved 7bps qoq at 3.07%; domestic margin improving 4bps qoq to 3.47% and international mar

BSE 303.45 [1.10] ([0.36]%)
NSE 303.15 [1.20] ([0.39]%)

***Note: This is a NSE Chart

 

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