- 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
|(Rs mn)||Q3 FY13||Q2 FY13||% qoq||Q3 FY12||% yoy|
|Total Interest Income||101,383||100,263||1.1||85,919||18.0|
|Net Interest Income||34,990||33,712||3.8||27,120||29.0|
|(Rs bn)||Q3 FY13||Q2 FY13||% qoq||Q3 FY12||% yoy|
|(Rs mn)||Q2 FY13||Q1 FY13||chg qoq||Q2 FY12||chg yoy|
|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)|
|Gross NPA (%)||3.3||3.5||(0.2)||3.8||(0.5)|
|Net NPA (%)||0.8||0.8||(0.0)||0.8||(0.1)|
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
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