icici bank, 4th february, 2013

7/29/2019 ICICI Bank, 4th February, 2013

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Please refer to important disclosures at the end of this report 1

Pre-prov. profit 3,452 3,193 8.1 2,687 28.5

Source: Company, Angel Research

For 3QFY2013, ICICI bank delivered a strong performance, both on theoperating as well as on the asset quality front. The bank witnessed a growth24.1% yoy growth in its operating income, in-line with our expectations. However,lower-than-expected provisioning, as the bank managed to broadly hold on to itsgood asset quality, enabled it to deliver strong earnings growth of 30% yoy.

During 3QFY2013, the bank’sadvances grew by 16.5% yoy, aided by a strong growth of 26.6% and 23.9% yoy in the corporate book and the SME book, respectively. The growth in the retailportfolio came in healthy at 17.2% yoy. Deposits accretion remained moderate with agrowth of 9.9% yoy. Growth in CASA deposits, stood muted at 3.2% yoy. Whilesavings deposits increased by 10.8% yoy, the current deposits declined by 10.9% yoy. As of 3QFY2013, CASA ratio improved sequentially by 24bp to 40.9%. The reportedoverall NIM improved by 7bp sequentially at 3.1%, mainly on account of 9bp qoqimprovement in international NIM to 1.31% (due to reduction of excess liquidity on large bond redemption in October, 2012) and also due to 4bp sequentialimprovement in the reported domestic NIM to 3.47%. The non-interest income(excluding treasury) remained flat on a yoy basis to ` 1,964cr, as trends ofmoderation in the fee income continued. The bank registered a treasury gain of

` 251cr (primarily bond gains) compared to a loss of ` 65cr in 3QFY2012. During3QY2013, the bank’s gross NPA levels came off sequentially by 2.7%, on anabsolute basis, aided by better than expected recoveries/upgrades andsequentially lower slippages. Recoveries/upgrades came in better than expectedand remained healthy at ` 570cr, compared to ` 558cr in 2QFY2013. Slippagescame in at ` 850cr (annualized slippages rate at 1.3%) compared to ` 1,220cr in2QFY2013 (annualized slippage rate of 1.9%).

The bank’s substantial branch expansion in the past three tofour years is expected to sustain a far more favorable deposit mix going forward.Moreover, a lower risk balance sheet has driven down NPA provisioning costs, whichwe believe will drive a 22.8% CAGR in net profit over FY2012-14E and enable a RoEof 15.9% by FY2014E (with further upside from financial leverage). At the currentmarket price, the bank’s core banking business (after adjusting ` 153/share towardsvalue of the subsidiaries) is trading at 2.0x FY2014E ABV (including subsidiaries, thestock is trading at 1.9x FY2014E ABV). We value the bank’s subsidiaries at ` 153/share and the core bank at ` 1,251/share (2.5x FY2014E ABV).

% chg 11.1 19.0 28.5 19.8

% chg 40.9 25.5 28.5 17.4

NIM (%) 2.6 2.7 2.9 3.0

P/E (x) 26.2 20.9 16.3 13.8

P/ABV (x) 2.4 2.2 2.1 1.9

RoA (%) 1.3 1.3 1.5 1.5

RoE (%) 11.7 12.8 14.9 15.9


CMP ` 1,171

Target Price ` 1,404

Investment Period 12 Months

Stock Info

Sector Banking

Market Cap ( ` cr) 134,651

Beta 1.3

52 Week High / Low 1,231/767

Avg. Daily Volume 324,160

Face Value ( ` ) 10

BSE Sensex 19,781

Nifty 5,999

Reuters Code ICBK.BO

Bloomberg Code ICICIBC@IN

Shareholding Pattern (%)

Promoters -

MF / Banks / Indian Fls 24.8

FII / NRIs / OCBs 66.5

Indian Public / Others 8.7

Abs. (%) 3m 1yr 3yr

Sensex 6.6 14.3 20.9

ICICI Bank 10.8 31.8 40.6

022 – 3935 7800 Ext: 6808

[email protected]

022 – 3935 7800 Ext: 6872

[email protected]

Performance Highlights

3QFY2013 Result Update | Banking

February 1, 2013



ICICI Bank | 3QFY2013 Result Update

February 1, 2013 2

Exhibit 1: 3QFY2013 performance (Standalone)

- on Advances / Bills 7,066 6,849 3.2 5,686 24.3 20,370 16,002 27.3- on investments 2,742 2,745 (0.1) 2,473 10.9 8,189 7,069 15.8

- on balance with RBI & others 136 149 (8.5) 134 1.6 409 363 12.5

- on others 194 284 (31.8) 299 (35.3) 742 935 (20.6)

Other income excl. treasury 1,964 1,871 5.0 1,957 0.3 5,736 5,444 5.3

- Fee income 1,771 1,709 3.6 1,701 4.1 5,127 4,979 3.0

- Treasury income 251 172 45.9 (65) (486.2) 402 (170) (336.5)

- Other income 193 162 18.9 256 (24.7) 609 465 30.8

- Employee expenses 941 966 (2.6) 837 12.4 2,894 2,412 20.0

- Other Opex 1,321 1,255 5.2 1,080 22.3 3,712 3,217 15.4

Provisions & Contingencies 369 508 (27.4) 341 8.1 1,343 1,114 20.5

Provision for Tax 834 729 14.3 618 34.9 2,231 1,598 39.7

Effective Tax Rate (%) 27.0 27.2 (13)bp 26.3 69bp 27.0 25.9 111bp


Exhibit 2: 3QFY2013 – Actual vs. estimates

Net interest income 3,499 3,510 (0.3)

Other income 2,215 2,064 7.3

Operating expenses 2,261 2,322 (2.6)

Provisions & cont. 369 465 (20.8)

Prov. for taxes 834 763 9.2





February 1, 2013 3

Exhibit 3: 3QFY2013 performance analysis (Standalone)

Advances ( ` cr) 286,766 275,076 4.2 246,157 16.5Deposits ( ` cr) 286,418 281,438 1.8 260,589 9.9

Credit-to-Deposit Ratio (%) 100.1 97.7 238bp 94.5 566bp

Current deposits ( ` cr) 35,674 33,800 5.5 40,039 (10.9)

Saving deposits ( ` cr) 81,463 80,618 1.0 73,498 10.8

CASA deposits ( ` cr) 117,137 114,418 2.4 113,537 3.2

CASA ratio (%) 40.9 40.7 24bp 43.6 (267)bp

CAR (%) 19.5 18.3 125bp 18.9 65bp

Tier 1 CAR (%) 13.3 12.8 42bp 13.1 12bp

Reported NIM 3.1 3.0 7bp 2.7 37bp

Cost-to-income ratio 39.6 41.0 (145)bp 41.6 (206)bp

Gross NPAs ( ` cr) 9,763 10,036 (2.7) 9,723 0.4

Gross NPAs (%) 3.3 3.5 (23)bp 3.8 (51)bp

Net NPAs ( ` cr) 2,182 2,134 2.2 2,048 6.5

Net NPAs (%) 0.8 0.8 (2)bp 0.8 (7)bp

Provision Coverage Ratio (%) 77.7 78.7 (100)bp 78.9 (120)bp

Provision exps. to avg. assets (%) 0.3 0.4 (13)bp 0.3 (2)bp


Advance growth healthy; NIM improves by 7bp sequentially

During 3QFY2013, the bank’s advances grew by 16.5% yoy (4.2% qoq), aided by

a strong 26.6% yoy (5.0% qoq) growth in the corporate book and a 23.9% yoy

(4.2% qoq) growth in the SME book. Growth in the corporate portfolio was due to

increased working capital funding, project loans disbursement from existing

sanctions, and some short term lending to high quality corporates, which is due for

maturing in this year itself.

The overseas loan book increased marginally by 5.8% yoy (3.8% qoq) on account

of INR depreciation. In dollar terms the overseas loan book grew by 2.0% yoy

(remained stable sequentially). Moderate growth of 13.2% yoy was witnessed inthe rural loan book of the bank.

The growth in the retail portfolio came in healthy at 17.2% yoy. Within retail,

robust traction was witnessed in housing loans, which grew by 18.6% on a yoy

basis, whereas moderate growth of 13.3% yoy was registered in vehicle and credit

card loans.

Deposits accretion remained moderate with a growth of 9.9% yoy (1.8% qoq). The

growth in CASA deposits, stood muted at 3.2% yoy (2.4% qoq). While savings

deposits increased by 10.8% yoy (1.0% qoq), the current deposits declined by

10.9% yoy (grew by 5.5% qoq). As of 3QFY2013, the CASA ratio improved

sequentially by 24bp to 40.9% (though lower by 267bp yoy). The average CASA

during the quarter remained stable sequentially at 37.4%.




February 1, 2013 4

The reported overall NIM improved by 7bp sequentially at 3.1%, mainly on

account of 9bp qoq improvement in international NIM to 1.31% (due to reduction

of excess liquidity maintained by international branches on large bond redemption

in October, 2012) and also due to 4bp sequential improvement in the reporteddomestic NIM to 3.47%.

Going ahead, the Management expects the bank’s loan book growth in FY2014 to

be mainly driven by healthy traction in the retail portfolio (20% plus growth),

working capital demand in the corporate segment (20% plus growth) and

continued off-take out of the past project sanctions (to continue for next few

quarters; after that it will depend upon the incremental sanctions). On the overseas

loan book, the growth would be less than that of the domestic loan book, driven

largely by the appetite of the borrowers for foreign currency loans over domestic

rupee loans. The Management expects international NIM to pick up once again

from here and move towards the 1.5% mark over the coming quarters. Also thebank has a clear strategy of focusing on margins rather than chasing balance

sheet growth and hence has guided for a healthy overall margin of 3.0% for

FY2013.

Exhibit 4: Higher Corporate/Retail/SME lending, aiding healthy adv. gr.

Rural 19,787 18,705 5.8 17,477 13.2 6.9

Overseas 73,699 70,970 3.8 69,663 5.8 25.7

Corporate 82,302 78,397 5.0 64,986 26.6 28.7

SME 14,338 13,754 4.2 11,569 23.9 5.0

Retail 96,640 93,251 3.6 82,463 17.2 33.7

- Housing 64,942 61,359 5.8 54,755 18.6 22.6

- Vehicle 25,126 25,644 (2.0) 22,182 13.3 8.8

- Personal 1,160 933 24.4 990 17.2 0.4

- Credit cards 2,803 2,611 7.3 2,474 13.3 1.0

- Other retail 2,609 2,704 (3.5) 2,062 26.6 0.9


Exhibit 5: Advance growth healthy


Exhibit 6: CASA ratio improves sequentially to 40.9%


94.599.3 100.2

97.7100.1

60.0

70.0

80.0

90.0

100.0

110.0

(3.0)

-

3.0

6.0

9.0

3QFY12 4QFY12 1QFY13 2QFY13 3QFY13

Adv. qoq growth Dep. qoq growth CDR (%, RHS)

4 3 . 6

4 3 . 5

4 0 . 6

4 0 . 7

4 0 . 9

18.0

9.1

12.410.9

3.2

-

10.0

20.0

25.0

30.0

35.0

40.0

45.0


CASA ratio (%) CASA yoy growth (%)




February 1, 2013 5

Exhibit 7: Reported NIM improves by 7bp qoq


Exhibit 8: NII growth remains strong


Fee income moderation continues

During 3QFY2013, the non-interest income for the bank excluding treasury

remained flat on a yoy basis to ` 1,964cr, as trends of moderation in the fee

income continued. Amongst the various fee income streams on the corporate side,

while the lending-linked fees, loan processing fees and syndication fees have come

down (due to slowdown in new projects and financial closures), the commercial

banking and forex related fees have grown well. Hence, the overall fee income

from the corporate segment has declined. On the retail side, the growth in some of

the fee income segments like third party distribution and forex income has been in

excess of 20%, leading to a healthy growth in the range of 10-20% in various retail

fee income streams during 3QFY2013.

The bank registered a treasury gain of ` 251cr (primarily bond gains) compared to

a loss of ` 65cr in 3QFY2012. Other income of the bank decreased to ` 193cr,

from ` 256cr in 3QFY2012. The bank has started to witness traction in retail fee

income streams. However, improving the fee income performance in-line with

advance growth in medium term remains an endeavor for the Management.

Exhibit 9: Healthy growth in other income, aided by treasury gains

Fee income 1,771 1,709 3.6 1,701 4.1

Treasury 251 172 45.9 (65) (486.2)Others 193 162 19.1 256 (24.6)

Other income excl. treasury 1,964 1,871 5.0 1,957 0.4


2.7

3.0 3.0 3.03.1

1.0

1.5

2.0

2.5

3.0

3.5


NIM (Reported, %)

17.3

23.7

32.434.5

29.0

-

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

2,000

2,300

2,600

2,900

3,200

3,500

3,800


NII (` cr) YoY growth (%, RHS)




February 1, 2013 6

Exhibit 10: Fee income moderation continues


Exhibit 11: Still, healthy share of fee income in RoA


Asset quality stable sequentially

During 3QFY2013, the bank managed to broadly hold on to its good asset

quality, as its gross NPA levels came off sequentially by 2.7%, on an absolute

basis, aided by better-than-expected recoveries and upgrades and sequentially

lower slippages. Slippages for the quarter stood at ` 850cr (annualized slippages

rate at 1.3%) compared to ` 1,220cr in 2QFY2013 (annualized slippage rate of

1.9%). Recoveries/upgrades for the quarter came in better than expected and

remained healthy at ` 570cr, compared to ` 558cr in 2QFY2013. Gross and net

NPA ratio came in lower sequentially by 23bp and 2bp qoq to 3.3%

and 0.8%, respectively. The PCR for the bank as of 3QFY2013 stands healthy

at 77.7%.

The bank restructured an additional ~ ` 350cr worth of accounts during the

quarter. Despite additional restructuring, the restructured book of the bank as of

3QFY2013 stood largely stable sequentially at ` 4,169cr, owing to deletions

and repayments. The Management expects the restructuring pipeline to be

~ ` 900-1,000cr.

Exhibit 12: O/s Restructured book trends


Exhibit 13: Asset quality stable sequentially


1 , 7

0 1

1 , 7

2 8

1 , 6

4 7

1 , 7

0 9

1 , 7

7 1

4.7

(3.5)

4.40.5

4.1

(5.0)

-

5.0

10.0

1,500

1,600

1,700

1,800


Fee Income (` cr) yoy growth (%, RHS)

1.51.5

1.4 1.4 1.4

1.0

1.1

1.2

1.3

1.4

1.5

1.6


Fee income to average assets (%)

3,070

4,256 4,172 4,158 4,169

-

750

1,500

2,250

3,000

3,750

4,500


( ` cr)

3 . 8

3 . 6

3 . 5

3 . 5

3 . 3

0 . 8

0 . 7

0 . 7

0 . 8

0 . 8

78.9 80.4 80.6 78.777.7

60.0

65.0

70.0

75.0

80.0

85.0

-

1.0

2.0

3.0

4.0

5.0


Gross NPAs (%) Net NPAs (%) Coverage ratio (%, RHS)




February 1, 2013 7

Under-leveraged branch network

The number of branches for the bank has almost doubled over the past three

years. The branch network improvement was partly aided by the merger with Bank

of Rajasthan. This extensive pan-India network of 2,895 branches as of 3QFY2013

is under-leveraged, as reflected in the falling CASA deposits/branch of ~ ` 40cr

compared to ` 65cr as of 3QFY2008 and the total assets/branch of ` 182cr

compared to ` 394cr as of 3QFY2008. Going forward, we expect the bank to

leverage this network to further grow its CASA market share.

Exhibit 14: Strong branch network...


Exhibit 15: Room for improvement in business per branch


1 , 6

2 6

2 , 5 1 2

2 , 5

5 2

2 , 8

9 5

-

400

800

1,2001,600

2,000

2,400

2,800

3,200

4 Q F Y 0 9

1 Q F Y 1 0

2 Q F Y 1 0

3 Q F Y 1 0

4 Q F Y 1 0

1 Q F Y 1 1

2 Q F Y 1 1

3 Q F Y 1 1

4 Q F Y 1 1

1 Q F Y 1 2

2 Q F Y 1 2

3 Q F Y 1 2

4 Q F Y 1 2

1 Q F Y 1 3

2 Q F Y 1 3

3 Q F Y 1 3

-

10

20

30

40

50

60

-

90

180270

360

450

4 Q F Y 0 9

1 Q F Y 1 0

2 Q F Y 1 0

3 Q F Y 1 0

4 Q F Y 1 0

1 Q F Y 1 1

2 Q F Y 1 1

3 Q F Y 1 1

4 Q F Y 1 1

1 Q F Y 1 2

2 Q F Y 1 2

3 Q F Y 1 2

4 Q F Y 1 2

1 Q F Y 1 3

2 Q F Y 1 3

3 Q F Y 1 3

Total Assets/Branch (` cr) CASA Deposi ts/Branch (` cr, RHS)




February 1, 2013 8

Overview of performance of subsidiaries

The consolidated net profit for 3QFY2013 rose by a healthy 21.7% yoy to

` 2,645cr. The consolidated reported RoE for 3QFY2013 improved to 15.7%

from 14.2% in 3QFY2012.

The overseas subsidiaries of the bank (viz ICICI Bank Canada and ICICI Bank

UK) remain over-capitalized, reflecting the bank’s strategy of consolidating

their operations (CAR in excess of 31% in both). Profitability wise, while ICICI

Bank Canada witnessed a strong performance with earnings growth of 25.8%

yoy, ICICI Bank UK reported a profit de-growth of 29.9% yoy.

ICICI Prudential Life reported a PAT of ` 397cr for 3QFY2013, registering a

growth of 13.8% yoy and maintained its leadership position with a market

share of 6.6% (April-December 2012) based on new business retail weighted

received premium. Though the profits of ICICI Prudential Life are expected toplateau from here on, the bank expects dividend of ` 75cr per quarter (it had

received ` 90cr as dividend from ICICI Prudential Life in 3QFY2013).

ICICI Lombard General Insurance reported a PAT of ` 95cr for 3QFY2013

compared to ` 101cr in 3QFY2012.

ICICI Home Finance reported a PAT of ` 53cr for 3QFY2013, which was lower

by 20.4% on a yoy basis.

3QFY2013 performance of other smaller subsidiaries was mixed. While ICICI

Securities and ICICI AMC reported a PAT growth of 64.7% yoy and 27.3% yoy,

PAT for ICICI Venture came in at ` 4cr compared to ` 53cr in 3QFY2012 andPAT for ICICI Securities PD more than halved on a yoy basis to ` 23cr.

Exhibit 16: Performance of subsidiaries

ICICI Bank UK PAT (USD mn) 5.4 7.7 (29.9)

ICICI Bank Canada PAT (CAD mn) 8.3 6.6 25.8

ICICI Bank Eurasia PAT (USD mn) 2.4 0.8 200.0

ICICI Home Finance PAT ( ` cr) 53 67 (20.4)

ICICI PrudentialLife Insurance

APE ( ` cr) 904 860 5.1

NBP ( ` cr) 136 138 (1.4)

NBP margin (%) 15.0 16.0 (6.3)

AuM ( ` cr) 74,982 63,222 18.6

PAT ( ` cr) 397 367 13.8

ICICI LombardGen. Insurance

Gross Premium ( ` cr) 1,687 1,356 24.4

PAT ( ` cr) 95 101 (5.9)

ICICI Securities PAT ( ` cr) 28 17 64.7

ICICI Securities PD PAT ( ` cr) 23 49 (53.1)

ICICI Venture PAT ( ` cr) 4 53 (92.5)

ICICI Prudential AMC PAT ( ` cr) 28 22 27.3





February 1, 2013 9

Investment arguments

Well positioned to garner strong market share gains in CASA

deposits

In our view, the bank’s substantial branch expansion from 955 branches at the

end of 3QFY2008 to 2,895 branches by 3QFY2013, and strong capital adequacy,

at 19.5% (Tier-I at 13.3%) has positioned it to gain both CASA and credit market

share, respectively. In fact, the bank has again been gaining market share in

savings accounts since FY2010. Over FY2010-12, the bank improved its market

share of savings deposits by 14bp, capturing a substantial 5.6% incremental

market share.

Improved deposit mix to lead to better NIM

The bank’s strategic transformation has expectedly resulted in a significantly better

balance sheet and earnings quality. The distinguishing feature of the bank’s

performance in FY2010 was the improvement in the CASA ratio to above 42.1%

(transformative considering that the ratio was as low as 22% at the end of FY2007

and 29% even as recently as FY2009). The CASA ratio has remained healthy at

40.9% even in 3QFY2013. Apart from the paradigm shift in the deposit mix

reflected in its 40.9% CASA ratio, the bank has largely exited unattractive business

segments such as small-ticket personal loans in the domestic segment and most

non-India related exposures in its international business.

Asset quality trends remain healthy

The bank’s asset quality continues to show improvement, with a stable to declining

trend in additions to gross as well as net NPAs. The slippage ratio of the bank has

remained comfortable so far. For 9MFY2013 the annualized gross slippages ratio

was higher at ~1.5% compared to 1.4% in FY2012, as it included a chunky

exposure of ` 500cr to a media account. Also, the provisioning coverage ratio for

the bank remained comfortable at 77.7% as of 3QFY2013. The restructured book

has remained stable over FY2013 and for 3QFY2013, it was lower than the levels

witnessed as of FY2012 end.

The reduction in risk profile of advances has expectedly resulted in a

commensurate decline in NPA provisioning costs and reflected in improved RoA

from 1.0% in FY2010 to 1.3% in FY2012. Further, the Management expects to

improve its RoA to 1.7% by FY2014E.

Outlook and Valuation

We have a positive view on ICICI Bank, given its market-leading businesses across

the financial services spectrum. Moreover, we believe the bank is decisively

executing a strategy of consolidation, which has resulted in an improved deposit

and loan mix and should drive improved operating metrics over the medium term.

The bank’s substantial branch expansion in the past three to four years is expected

to sustain a far more favorable deposit mix going forward. Moreover, a lower risk

balance sheet has driven down NPA provisioning costs, which we believe will drive

a 22.8% CAGR in net profit over FY2012-14E and enable a RoE of 15.9% by

FY2014E (with further upside from financial leverage).




February 1, 2013 10

At the current market price, the bank’s core banking business (after adjusting

` 153/share towards value of the subsidiaries) is trading at 2.0x FY2014E ABV

(including subsidiaries, the stock is trading at 1.9x FY2014E ABV). We value the

bank’s subsidiaries at `

153/share and the core bank at `

1,251/share (2.5xFY2014E ABV).

Exhibit 17: SOTP valuation summary

ICICI Bank 2.5x FY2014E ABV 1,251

Life Insurance 16.0x FY2014E NBP 76

General Insurance 10x FY2012 PAT 14

Others (Home Fin, AMC, VC, SecuritiesSecurities PD and Overseas subsidiaries)

63

Source: Angel Research

Exhibit 18: Key assumptions

Credit growth 18.0 22.0 18.0 22.0

Deposit growth 16.0 22.0 16.0 22.0

CASA ratio 42.2 41.5 42.2 41.5

NIMs 2.9 3.0 2.9 3.0

Other income growth 10.4 18.1 11.8 13.6Growth in staff expenses 18.0 18.0 14.0 17.0

Growth in other expenses 17.0 17.0 17.0 17.0

Slippages 1.6 1.7 1.7 1.7

Treasury gain/(loss) (% of investments) 77.5 75.0 77.5 75.0


Exhibit 19: Change in estimates

NII 13,794 13,794 - 16,523 16,523 -

Non-interest income 8,425 8,523 1.2 9,924 9,694 (2.3)

Operating expenses 9,220 9,080 (1.5) 10,829 10,623 (1.9)

Provisions & cont. 2,023 1,858 (8.2) 2,440 2,135 (12.5)

Prov. for taxes 3,006 3,074 2.3 3,623 3,708 2.3





February 1, 2013 11

Exhibit 20: Angel EPS forecast vs consensus

FY2013E 72.0 70.9 1.6

FY2014E 84.6 83.0 1.9 Source: Bloomberg, Angel Research

Exhibit 21: P/ABV band


Exhibit 22: P/E band


0

5

10

15

20

25

30

35

40

A p r - 0 6

S e p - 0

6

F e b - 0

7

J u l - 0 7

D e c - 0

7

M a y - 0

8

O c t - 0 8

M a r - 0 9

A u g - 0

9

J a n - 1

0

J u n - 1

0

N o v - 1

0

A p r - 1 1

S e p - 1

1

F e b - 1

2

J u l - 1 2

D e c - 1

2

Price (`) 0.5x 0.8x 1.1x 1.4x 1.7x

0400

800

1,200

1,600

2,000

2,400

2,800

3,200

3,600

A p r -

0 5

A u g -

0 5

D e c -

0 5

A p r -

0 6

A u g -

0 6

D e c -

0 6

A p r -

0 7

A u g -

0 7

D e c -

0 7

A p r -

0 8

A u g -

0 8

D e c -

0 8

A p r -

0 9

A u g -

0 9

D e c -

0 9

A p r -

1 0

A u g -

1 0

D e c -

1 0

A p r -

1 1

A u g -

1 1

D e c -

1 1

A p r -

1 2

A u g -

1 2

D e c -

1 2

Price (`) 7x 17x 27x 37x




February 1, 2013 12

Exhibit 23: ICICI Bank – Premium/Discount to the Sensex

Source: Bloomberg, Angel Research

Exhibit 24: Recommendation summary

AxisBk Buy 1,508 1,753 16.2 2.0 2.4 10.8 16.4 1.6 20.1

FedBk Accumulate 511 557 8.9 1.2 1.4 9.9 6.4 1.2 13.1

HDFCBk Neutral 640 - - 3.6 - 17.7 28.1 1.8 22.1

SIB Buy 28 34 21.9 1.1 1.4 6.8 6.9 1.0 17.7

YesBk Accumulate 532 576 8.4 2.7 2.9 12.5 24.1 1.5 23.6

AllBk Buy 160 188 18.0 0.7 0.8 4.8 (5.2) 0.8 14.7

AndhBk Neutral 111 - - 0.8 - 5.1 (4.6) 0.8 13.8

BOB Neutral 867 - - 1.0 - 6.3 6.5 1.0 17.1

BOI Accumulate 354 380 7.4 0.9 1.0 5.4 18.2 0.8 16.0

BOM Neutral 59 - - 0.7 - 4.5 44.3 0.6 16.9

CanBk Accumulate 472 516 9.2 0.9 1.0 5.9 4.1 0.8 14.7

CentBk Neutral 83 - - 0.7 - 4.1 95.5 0.5 14.3

CorpBk Buy 428 517 20.7 0.7 0.8 4.3 (3.1) 0.8 14.8

DenaBk Buy 108 132 22.6 0.7 0.8 4.4 3.5 0.8 15.9

IDBI# Buy 106 122 15.1 0.7 0.8 4.7 18.4 0.9 14.1

IndBk Buy 203 245 20.9 0.7 0.9 4.7 4.4 1.1 16.8

IOB Accumulate 80 88 10.2 0.5 0.6 4.0 23.9 0.6 13.4

J&KBk Neutral 1,377 - - 1.2 - 7.0 9.2 1.4 18.0

OBC Neutral 322 - - 0.7 - 5.4 23.2 0.8 13.5

PNB Buy 899 1,053 17.1 0.9 1.1 5.4 8.0 1.0 17.5

SBI* Accumulate 2,410 2,600 7.9 1.6 1.7 9.4 21.5 1.0 17.7

SynBk Buy 133 157 17.5 0.7 0.9 4.8 12.4 0.7 16.4

UcoBk Neutral 75 - - 0.8 - 5.0 2.6 0.5 13.5

UnionBk Accumulate 249 286 14.9 0.8 1.0 5.3 20.7 0.8 16.6

UtdBk Buy 74 87 17.5 0.5 0.6 3.4 19.6 0.7 16.1

VijBk Accumulate 58 62 6.8 0.7 0.7 5.3 9.7 0.5 12.6

Source: Company, Angel Research; Note:*Target multiples=SOTP Target Price/ABV (including subsidiaries), #Without adjusting for SASF

(40)

(20)

0

20

40

60

80

100

A p r - 0 6

S e p - 0

6

F e b - 0

7

J u l - 0 7

D e c - 0

7

M a y - 0

8

O c t - 0 8

M a r - 0 9

A u g - 0

9

J a n - 1

0

J u n - 1

0

N o v - 1

0

A p r - 1 1

S e p - 1

1

F e b - 1

2

J u l - 1 2

D e c - 1

2

Premium/Discount to Sensex Avg. Historical Premium(%)




February 1, 2013 13

Company Background

ICICI Bank is India's largest private sector bank, with a 5.5% market share in

credit. The bank has a pan-India extensive network of nearly 2,900 branches and

over 10,000 ATMs as well as large overseas presence (overseas loans comprise

26% of total loans). The bank also has market-leading subsidiaries in life

insurance, general insurance and asset management.




February 1, 2013 14

Income statement (Standalone)

- YoY Growth (%) 10.9 (10.8) 11.1 19.0 28.5 19.8

- YoY Growth (%) (12.3) (8.7) (6.5) 12.9 13.6 13.7

- YoY Growth (%) (1.2) (9.8) 2.9 16.4 22.4 17.5

- YoY Growth (%) (13.6) (16.8) 12.9 18.6 15.7 17.0

- YoY Growth (%) 10.1 (4.7) (3.4) 14.8 27.4 17.8

- YoY Growth (%) 30.4 (13.0) (47.8) (30.6) 16.9 14.9

- YoY Growth (%) (5.4) 4.0 35.9 30.2 29.3 18.3

- as a % of PBT 28.4 26.5 23.8 26.5 27.0 27.5

- YoY Growth (%) (17.7) 6.8 40.9 25.5 28.5 17.4

Share Capital 1,463 1,465 1,502 1,503 1,503 1,503- Equity 1,113 1,115 1,152 1,153 1,153 1,153

- Preference 350 350 350 350 350 350

Reserve & Surplus 48,420 50,503 53,939 59,252 64,663 71,006

Deposits 218,348 202,017 225,602 255,500 296,380 361,584

- Growth (%) (10.7) (7.5) 11.7 13.3 16.0 22.0

Borrowings 67,324 63,447 72,813 102,200 125,402 152,143

Tier 2 Capital 25,482 30,467 36,391 37,615 36,674 35,757

Other Liab. & Prov. 18,265 15,501 15,987 17,577 18,752 22,072

Cash Balances 17,536 27,514 20,907 20,461 20,006 21,695

Bank Balances 12,430 11,359 13,183 15,768 18,123 21,533

Investments 103,058 120,893 134,686 159,560 178,272 202,991

Advances 218,311 181,206 216,366 253,728 299,399 365,266

- Growth (%) (3.2) (17.0) 19.4 17.3 18.0 22.0

Fixed Assets 3,802 3,213 4,744 4,615 5,145 5,929

Other Assets 24,164 19,215 16,347 19,515 22,430 26,651

- Growth (%) (6.3) (4.4) 12.1 17.1 14.9 18.8




February 1, 2013 15

Ratio analysis (Standalone)

NIMs 2.6 2.4 2.6 2.7 2.9 3.0Cost to Income Ratio 41.7 38.5 42.2 43.0 40.7 40.5

RoA 0.9 1.0 1.3 1.3 1.5 1.5

RoE 9.2 9.7 11.7 12.8 14.9 15.9

CASA Ratio 28.7 41.7 45.1 43.5 42.2 41.5

Credit/Deposit Ratio 100.0 89.7 95.9 99.3 101.0 101.0

CAR 15.5 19.4 19.5 18.5 18.1 16.0

- Tier I 11.8 14.0 13.2 12.7 11.9 10.9

Gross NPAs 4.3 5.1 4.5 3.6 3.7 3.8

Net NPAs 2.1 2.1 1.1 0.7 0.9 1.0

Slippages 2.2 1.5 1.5 1.3 1.7 1.7

Loan Loss Prov. /Avg. Assets 1.0 1.2 0.5 0.2 0.3 0.3

Provision Coverage 52.8 59.5 76.0 80.4 77.5 75.0

EPS 30.7 32.8 44.7 56.1 72.0 84.6

ABVPS (75% cover.) 425.7 449.8 478.3 524.0 570.9 624.6

DPS 11.0 12.0 14.0 16.5 22.5 26.5

PER (x) 38.1 35.7 26.2 20.9 16.3 13.8

P/ABVPS (x) 2.8 2.6 2.4 2.2 2.1 1.9

Dividend Yield 0.9 1.0 1.2 1.4 1.9 2.3

NII 2.4 2.3 2.4 2.5 2.8 2.9

(-) Prov. Exp. 1.3 1.2 0.6 0.4 0.4 0.4

Adj. NII 1.1 1.0 1.8 2.1 2.4 2.5

Treasury 0.5 0.2 (0.1) (0.0) 0.1 0.1

Int. Sens. Inc. 1.5 1.2 1.7 2.1 2.5 2.5

Other Inc. 1.6 1.8 1.7 1.6 1.4 1.4

Op. Inc. 3.1 3.0 3.5 3.7 3.9 4.0

Opex 1.9 1.6 1.8 1.8 1.8 1.8PBT 1.3 1.4 1.7 1.9 2.1 2.1

Taxes 0.4 0.4 0.4 0.5 0.6 0.6

Leverage 10.1 9.5 9.2 9.6 10.0 10.7




Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com

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Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and

trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's

fundamentals.

The information in this document has been printed on the basis of publicly available information, internal data and other reliablesources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as thisdocument is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report .

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Disclosure of Interest Statement ICICI Bank

1. Analyst ownership of the stock No

2. Angel and its Group companies ownership of the stock No

3. Angel and its Group companies' Directors ownership of the stock No

4. Broking relationship with company covered No

Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)Reduce (-5% to -15%) Sell (< -15%)

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors

icici bank, 4th february, 2013

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