31 July 2014

1QFY15 Results Update | Sector: Financials

ICICI Bank

Alpesh Mehta (Alpesh.Mehta@MotilalOswal.com); +91 22 3982 5415

Sohail Halai (Sohail.Halai@MotilalOswal.com); +91 22 3982 5430

BSE SENSEX S&P CNX CMP: INR1,473 TP: INR1,875 Buy 25,895 7,721

Bloomberg ICICIBC IN

Equity Shares (m) 1,154.9 M.Cap. (INR b) / (USD b)

1,465.9/24.2

52-Week Range (INR) 1,318/759

1, 6, 12 Rel. Per (%) 1/23/28

Financials & Valuation (INR Billion)

Y/E Mar 2015E 2016E 2017E

NII 186.6 223.1 270.3 OP 188.5 225.6 274.2 NP 112.3 136.0 165.8 EPS (INR) 97 118 144 EPS Gr. (%) 14.5 21.1 21.9 ABV/Sh. 557.7 640.5 741.6 AP/E (x) 12.6 10.2 8.1 AP/BV (x) 2.1 1.8 1.5

RoE (%) 15.4 16.2 17.1

RoA (%) 1.8 1.9 1.9

* BV adjusted for investment in

subsidiaries, Prices adj. for sub

value

ICICI Bank’s (ICICIBC) 1QFY15 NII/PPP/PAT growth of 17-18% YoY was in-line estimate. Stable NIMs QoQ (3.4%), fall in net stress addition QoQ (INR15.5b v/s INR27.8b in 4QFY14), healthy traction in SA deposits (+4% QoQ and 16% YoY) and retail loans (+4% QoQ and 26% YoY) were the key positives.

Like other large financials, Fee income growth for ICICIBC also moderated (+8% YoY, ~6% below estimate). Lower fees were compensated by higher than expected non-core income of INR9.1b (v/s estimate of INR7b). Containment of opex (+13% YoY) helped core PPP growth of 15%+ YoY.

Gross slippages and fresh restructuring were INR11.9b (v/s INR12.4b) and INR13.9b (v/s INR21.6b in 4QFY14) respectively. Led by repayment/ slippages net addition to restructured loans was INR7.1b. Net stress loans remains contained at 3.8% of customer assets. Pipeline for restructuring stood INR15b.

Guidance: (1) NIM of 3.3-3.4% (2) Domestic loan growth 2-4% higher than system and overseas growth to remain calibrated (3) C/I ratio of less than 40% and (4) Net stress additions lower than FY14 and credit cost to be 90bp.

Maintain Buy: Healthy core operations driven by gradual NIM improvement and strong control over opex are leading to strong core ROAs of 1.6%+ despite moderate fee income. Improvement in macro-economic environment and resolution of infrastructure bottle-necks shall lead to reduction in NSL (currently at 3.8%). ICICIBC is well positioned to leverage onto opportunities with core ROA of 1.6%, strong distribution network and capitalization (Tier I of 12.6%). We maintain estimate and expect earnings CAGR of 18%+ over FY14/17 v/s 15% CAGR of balance-sheet growth.

Investors are advised to refer through disclosures made at the end of the Research Report.

31 July 2014 2

ICICI Bank

Quarterly performance v/s our estimates and reasons for deviation (INR m) Y/E March 1QFY15A 1QFY15E Var. (%) Comments

Net Interest Income 44,919 45,061 0 NIM and loan growth in-line with expectation % Change (YoY) 18 18 Other Income 28,498 27,966 2 One off income of INR1.03b; Fees 6% below est

Net Income 73,417 73,027 1 Operating Expenses 28,250 28,588 -1 Operating Profit 45,167 44,439 2 One off income helped despite lower fees % Change (YoY) 18 17 Other Provisions 7,261 6,478 12 PCR stable QoQ; UFCE provisions at INR550Mn

Profit before Tax 37,906 37,961 0 Tax Provisions 11,353 11,388 0 Net Profit 26,553 26,573 0

Core profitability marginally lower due to lower fees % Change (YoY) 17 17

Source: MOSL, Company

Gradual improvement in NIM continues; healthy traction in SA deposits NIM for the quarter came in at 3.4% (up 5bp QoQ), marginally above

expectation. Domestic NIM improved 8bp QoQ to 3.8% (partially helped by improvement in CD ratio by 170bp), whereas international NIM declined 8bp QoQ to 1.6% (stable YoY).

SA deposit growth was healthy at 16% YoY and 4% QoQ. Average daily CASA ratio of remains healthy at ~40%.

Stress addition decline QoQ; credit cost guidance maintained Slippages for the quarter were at INR11.9b (slippage ratio of 1.6% v/s 1.7% in

4QFY14). Recoveries and upgrades were healthy at INR3.6b v/s INR4.2b in 4QFY14 and bank wrote-off INR3.9b in 1QFY15.

GNPA/NNPA in absolute terms increased ~3% QoQ. PCR remained stable QoQ at 68.4%. In percentage terms GNPA and NNPA stood at 3.1% and 1% respectively.

ICICIBC restructured loan of INR13.9b (0.4% of customer assets), however led by reduction net stress additions to restructured loan was INR7.1b. Outstanding standard restructured loan portfolio (post provisions) increased to INR112.7b (2.8% of customer assets; up 7% QoQ).

Net stress addition (net slippages + change in net restructured loan) amounted to INR15.5b as compared to INR27.8b in 4QFY14.

Pipeline for restructuring stood at INR15b. Management mentioned that stress addition has peaked. FY15 stress addition is expected to be lower than FY14 and credit cost is expected to be ~90bp (including un-hedged forex exposure).

Moderate growth in fee income continues; Cost to income ratio improves Fee income grew 8% YoY (declined 2% QoQ) - ~6% below expectation. However,

overall other income came in at 2% above expectation at INR28.5b. During the quarter bank recognized gain of INR1.03b (v/s INR2.2b in 4QFY14) on

account of repatriation from overseas operations which assisted overall non-interest income growth of 15% YoY (down 4% QoQ). Trading gains came in at INR3.9b v/s expectation of INR2.5b.

Controlled employee expenses as well as other operating expenses (in-line with expectation) and healthy NII growth (18% YoY) led to improvement in cost to core income ratio to 40.6% v/s 42% in 1QFY14.

FY15 stress addition is expected to be lower than

FY14 and credit cost is expected to be at ~80bp

(90bp including un-hedged forex exposure

provisioning)

Non-core income was at INR9.1b (expectation of

INR7b) which helped profitability. Fee income

marginally lower than expectation

31 July 2014 3

ICICI Bank

Healthy retail performance; Corporate growth moderates Domestic loans grew 17% YoY (4% QoQ). International loans grew 10% YoY

(declined 1% QoQ) International loan as a proportion of overall loan was at 26% v/s 27% in 1QFY14. Overall loan growth was healthy at 15% YoY (2.5% QoQ).

In domestic portfolio, incremental loans were driven by retail segment (+4% QoQ and +25% YoY). Ex-CV segment retail loans grew 32% YoY.

Within retail loans home loans (5% QoQ and 25% YoY) and auto loans (7% QoQ and 46% YoY) were the key driver. CV loans declined 6% QoQ and 14% YoY. On a lower base personal loan and credit card reported strong growth of 16% QoQ and 69% YoY but as a proportion of overall loans remains low at 2.1%. Healthy housing loan growth at 25% YoY.

Domestic corporate loan portfolio grew just 4% QoQ and 8% YoY. Performance of subsidiaries; Consolidated RoE ~15% ICICI UK’s total assets increased 8% YoY (declined 9% QoQ) to USD4.1b and PAT

improved to USD6.3m v/s USD5.4m in 1QFY14. CAR stood at 23.3%. ICICI Canada’s total assets were at CAD5.6b (up 2% QoQ and 7.7% YoY). PAT

stood at CAD14.4m v/s CAD14.4m in 1QFY14. CAR was at 30.6%. ICICI Life Insurance reported PAT of INR3.8b (flat QoQ) and INR3.6b in 1QFY14.

APE for 1QFY15 increased to INR6.6b (v/s 5.4b in 1QFY14) and NBAP margin stood at 10.9% v/s 15% in 1QFY14. AUM witnessed strong growth of 15% YoY to INR861b.

1QFY15 general Insurance reported profit of INR720m (v/s INR2.3b in 1QFY14) which was lower due to higher realized investment income in 1QFY14.

Consolidate PAT for 1QFY15 grew 3% YoY to INR28.3b and consolidated RoE declined to 14.6% as compared to 15.6% in 1QFY14.

Conference Call highlights Bank continues to adopt a cautious approach in corporate and SME segment.

Loan growth in overseas branches was 8% YoY in USD terms (partially led by FCNR (B) product) and on a sequential basis it was flat.

Momentum in CASA deposits continues to be healthy and expect average CASA ratio to remain at 38-40%.

Slippages during the quarter slippages were driven by stress in SME and mid-corporate segment. Overall standard asset provision for the quarter was INR1b of which INR550m was towards UFCE related provisioning.

Bank restructured loan of INR13.9b (spread across however construction is one of the stress segments), current restructuring pipeline is INR15b. Cumulative slippages from restructured loan would have been ~12.5%. Outstanding Provisions on restructured loan stands at ~INR10b. Sale of loans to ARCs during the quarter was low at INR500m (one account).

During the quarter, bank made provisions of INR550m (1/4th) towards un-hedged forex exposure. In accordance with recent RBI guidelines on derivates (CVA) and un-hedged forex exposure Tier I was impacted by 45bp (35bp +10bp).

Domestic NIM at 3.8% v/s 3.63% in 1QFY14 and 3.72% in 4QFY14. International NIMs was stable QoQ at 1.63%.

Growth in retail fees continues to be healthy and contributed 55-60% of overall fees. Gain available on overseas subsidiaries (FCTR) is INR20b+.

Retail loans formed ~55% of the incremental domestic

loans in the quarter and ~75% in TTM

Ex-CV segment retail loans grew 32% YoY.

For 1QFY15 ICICI Life insurance reported PAT of

INR3.8b (+5% YoY)

Consolidated RoE stood at 14.6% as compared to

14.2% in 4QFY14.

31 July 2014 4

ICICI Bank

Guidance: (1) Loan growth 2-4% higher than industry average driven by 20%+ growth in retail loans; overseas loan growth to be opportunistic, (2) NIM to be in the range of 3.3-3.4%, (3) fee income growth to be dependent on market conditions, (4) operating efficiency a key focus area and (5) in FY15 gross stress addition to be lower than FY14. Provision to be contained to 90bp of average loans.

Bank received INR4b of dividend income from subsidiaries during the quarter. Number of employees stood at 72,800. Average salary hike for FY15 was ~10%. Bank targets to add 400 branches in FY15. Grameen branches stood at 450 at

the end of 1QFY15. Valuation and View Structural improvement in liability profile has helped ICICIBC to report gradual

improve in NIMs to 3.4%, despite increasing competition within retail business. We expect gradual improvement in NIMs to continue as contribution of higher margin domestic business (led by retail business) increase over next few quarters. We factor NIMs improvement of ~20bp over FY15/16. Consequently NII CAGR is expected to be 18% over FY14/16.

Fee income growth has been flat over FY08/13, and showed an improvement in FY14 (+12% YoY). While growth in FY15 is expected to be moderate, improvement in economic growth could lead to better corporate fees and improvement in retail business will aid overall fees. Consequently we factor fee income CAGR of 14% over FY14/17. Flexibility over opex will also provide cushion and core PPP CAGR is expected to be ~20% over FY14/17 (v/s 13% over FY09-14).

Despite challenges in economic environment bank contained net stress loans to 3.8% (1QFY15) as compared to 2.2% in FY11. Management remains confident of reducing stress additions in FY15 and have guided for credit cost of 0.9% (including INR2.2b of provisions for un-hedged forex exposure). We have built in core credit cost of 70bp over FY15/17 and we believe that risk of asset quality is built in valuations and room for negative surprise is limited. PAT CAGR is expected to be lower at 18%+ over FY14-17. Helped by strong RoAs of 1.8%+ (core ROA of 1.6%+), core RoE is expected to remain healthy at 15-16% over FY14/17E.

ICICICBC is well placed for next growth cycle with Tier I of 12.6%+ and largest branch network in the private financials. Key catalyst (a) Improvement in growth environment and clear picture on interest rate and macro environment (b) Resolution of issues in key infra sectors (c) value unlocking in insurance business. Maintain Buy with SOTP of INR1,875.

31 July 2014 5

ICICI Bank

Largely maintain our earnings estimate

INR b Old Est. Revised Est. Chg (%)

FY15 FY16 FY17 FY15 FY16 FY17 FY15 FY16 FY17 Net Interest Income 190.5 227.3 279.2 186.6 223.1 270.3 -2.1 -1.8 -3.2 Other Income 120.2 141.2 168.1 119.3 139.1 165.0 -0.7 -1.5 -1.8 Total Income 310.8 368.5 447.3 305.9 362.2 435.3 -1.6 -1.7 -2.7 Operating Expenses 119.0 138.3 161.9 117.5 136.5 161.1 -1.3 -1.3 -0.5 Operating Profits 191.8 230.2 285.4 188.5 225.6 274.2 -1.7 -2.0 -3.9 Provisions 28.3 32.3 40.0 28.0 31.3 37.3 -1.1 -3.1 -6.7 PBT 163.4 197.9 245.4 160.4 194.3 236.9 -1.8 -1.8 -3.5 Tax 49.0 59.4 73.6 48.1 58.3 71.1 -1.8 -1.8 -3.5 PAT 114.4 138.5 171.8 112.3 136.0 165.8 -1.8 -1.8 -3.5 Margins (%) 3.31 3.36 3.42 3.29 3.44 3.51 Credit Cost (%) 0.70 0.65 0.65 0.70 0.65 0.63 RoA (%) 1.8 1.8 1.9 1.8 1.9 1.9 RoE (%) 15.7 16.6 17.9 15.4 16.2 17.1

Source: MOSL, Company

ICICI Bank: SOTP FY16E

Key Ventures Stake (%) Total Value

INR b Total Value

USD b Value Per Share INR

% of Total Value Rationale

1,843 30.8 1,595 85.2 2.4x FY16E BV ex Invt in key ventures; Core ROA of 1.6% and Core ROE of 16%; Implied 15x core EPS

ICICI Pru Life Insurance 74 154 2.6 133 7.1 Apprisal Value ICICI Bank Canada 100 59 1.0 51 2.7 1x FY16E BV ICICI Bank UK 100 31 0.5 27 1.4 1x FY16E BV ICICI Home Finance 100 33 0.5 28 1.5 2x FY16E BV ICICI Pru AMC 51 26 0.4 23 1.2 Valued at 4% of AUM exp in FY16 ICICI Securities 100 38 0.6 33 1.7 15x FY16E PAT ICICI Lombard Gen. Ins 74 38 0.6 33 1.8 1x FY16 Networth ICICI Ventures 100 10 0.2 9 0.5 10% FY16E AUMs ICICI Sec. PD 100 12 0.2 10 0.5 1x FY16 Networth Total Value of Ventures 401 6.7 347 18.5 Less: 20% holding Discount 80 1.3 69 4 Value of Key Ventures 321 5.4 278 14.8 Target Price Post 20% Holding Co. Disc. 2,163 36.2 1,873 100 Current Value 1,701 28.5 1,473 Upside - % 27.2 27.2 27.2 Target Price w/o 20% Holding Co. Disc. 2,244 37.5 1,942 CMP (INR) 1,701 28.5 1,473 Upside - % 31.9 31.9 31.9

Source: MOSL, Company

31 July 2014 6

ICICI Bank

DuPont Analysis: Core PPP to remain superior; loan growth a key for healthy earnings growth

Y/E March FY07 FY08 FY09 FY10 FY11 FY12 FY13E FY14 FY15E FY16E FY17E Net Interest Income 1.89 1.96 2.15 2.19 2.34 2.40 2.70 2.91 2.96 3.09 3.17 Core Fee Income 1.68 1.78 1.67 1.52 1.67 1.50 1.35 1.37 1.35 1.36 1.36

Fee to core Income 47.07 47.57 43.81 41.04 41.58 38.46 33.23 32.01 31.38 30.55 29.99 Core Income 3.57 3.74 3.82 3.71 4.01 3.90 4.05 4.28 4.32 4.46 4.52 Operating Expenses 2.24 2.19 1.81 1.58 1.72 1.75 1.76 1.82 1.86 1.89 1.89

Cost to Core Income 62.83 58.53 47.31 42.58 42.87 45.01 43.40 42.54 43.19 42.51 41.72 Employee cost 0.54 0.56 0.51 0.52 0.73 0.79 0.76 0.75 0.78 0.80 0.80

Employee to total exp (%) 24.16 25.49 27.99 32.86 42.57 44.78 43.20 40.94 41.68 42.31 42.31 Others 1.70 1.63 1.30 1.06 0.99 0.97 1.00 1.08 1.09 1.09 1.09 Core operating Profits 1.33 1.55 2.01 2.13 2.29 2.14 2.29 2.46 2.45 2.56 2.64 Trading and others 0.64 0.59 0.28 0.49 0.06 0.18 0.28 0.47 0.54 0.57 0.58 Operating Profits 1.97 2.14 2.29 2.62 2.35 2.32 2.57 2.93 2.99 3.13 3.21 Provisions 0.75 0.78 0.98 1.18 0.59 0.35 0.35 0.46 0.45 0.43 0.44

NPA 0.48 0.68 0.96 1.17 0.51 0.22 0.27 0.40 0.37 0.37 0.37 Others 0.27 0.10 0.01 0.01 0.08 0.13 0.08 0.07 0.08 0.06 0.07

PBT 1.22 1.36 1.31 1.44 1.76 1.97 2.22 2.47 2.55 2.69 2.78 Tax 0.18 0.24 0.35 0.36 0.42 0.52 0.60 0.73 0.76 0.81 0.83

Tax Rate 14.74 17.77 26.56 24.70 23.80 26.56 26.95 29.77 30.00 30.00 30.00 RoA 1.04 1.12 0.96 1.08 1.34 1.44 1.62 1.73 1.78 1.89 1.94 Less: Dividend from Subs 0.15 0.34 0.09 0.10 0.11 0.16 0.18 0.23 0.25 0.27 0.28 Core RoA (ex-income from subs) 0.89 0.78 0.88 0.98 1.23 1.28 1.45 1.51 1.54 1.62 1.66 Core Leverage 15.04 12.67 10.33 9.73 9.37 9.97 10.25 10.13 10.04 10.04 10.30 RoE 13.43 9.87 9.08 9.57 11.55 12.76 14.81 15.25 15.42 16.23 17.09

Source: MOSL, Company

31 July 2014 7

ICICI Bank

Story in charts

International NIM stable, overall NIMs improves (%)

2.6 2.6 2.7 3.0 3.0 3.0 3.1 3.3 3.3 3.3 3.3 3.4 3.4

2.9

2.9

3.0 3.

3

3.3 3.4

3.5 3.

7

3.6

3.7

3.7

3.7

3.8

1.0 1.1 1.

4 1.5 1.6

1.2 1.3

1.3 1.

6 1.8

1.7

1.7

1.6

1QFY

12

2QFY

12

3QFY

12

4QFY

12

1QFY

13

2QFY

13

3QFY

13

4QFY

13

1QFY

14

2QFY

14

3QFY

14

4QFY

14

1QFY

15

Blended Domestic International

Avg. daily CASA ratio remains strong (%)

40.0

38.3 39.0

39.0

39.1

37.5

37.4 38.1

39.0 40

.3

39.1

39.1

39.5

1QFY

12

1HFY

12

9MFY

12

FY12

1QFY

13

1HFY

13

9MFY

13

FY13

1QFY

14

1HFY

14

9MFY

14

FY14

1QFY

15

Fee income below expectation

15.8

17.0

17.0

17.3

16.5

17.1

17.7

17.8

17.9

19.9

20.0

19.7

19.4

1.5 1.6

1.5

1.5

1.3

1.3

1.4

1.3

1.3 1.

4

1.4

1.4

1.3

1QFY

12

2QFY

12

3QFY

12

4QFY

12

1QFY

13

2QFY

13

3QFY

13

4QFY

13

1QFY

14

2QFY

14

3QFY

14

4QFY

14

1QFY

15

Fee Inc. (INR b) % to Avg. Assets

Core operating profit growth inline with loan growth at 15%

22 23 25 26 27 29 30 32 31 37 36 35 36

12.9

4.0 12

.5

6.4

25.2

23.6

20.5

21.4

15.0 30

.0

20.8

8.8 15

.4

1QFY

12

2QFY

12

3QFY

12

4QFY

12

1QFY

13

2QFY

13

3QFY

13

4QFY

13

1QFY

14

2QFY

14

3QFY

14

4QFY

14

1QFY

15

Core Op. Profit (INR b) YoY Gr (%)

Domestic loan gr. at 17% YoY; moderate gr. in overseas book

2,20

7

2,34

0

2,46

2

2,53

7

2,68

4

2,75

1

2,86

8

2,90

2

3,01

4

3,17

8

3,32

6

3,38

7

3,47

1

20 20 19

17

22

18 16

14

12

16 16 17 15

1QFY

12

1HFY

12

9MFY

12

FY12

1QFY

13

1HFY

13

9MFY

13

FY13

1QFY

14

1HFY

14

9MFY

14

FY14

1QFY

15

Loans (INR b) YoY Gr. (%)

Source: MOSL, Company

Mix changes in favor of secured retail loan (%)

25 29 28 27 28 26 26 25 27 27 28 27 262 2 1 1 1 1 1 1 2 2 2 2 2

35 33 32 37 33 34 33 36 34 34 35 37 375 5 5

6 6 5 5 5 5 5 4 4 49 8 7

24 24 26 29 32 34 34 32 32 33 31 30 30

1QFY

12

1HFY

12

9MFY

12

FY12

1QFY

13

1HFY

13

9MFY

13

FY13

1QFY

14

1HFY

14

9MFY

14

FY14

1QFY

15

International Unsecured Ret. Secured Ret.SME Agri Corp. & Othrs

Source: MOSL, Company

31 July 2014 8

ICICI Bank

Story in charts

Credit cost in –line with guidance (%)

0.8

0.6 0.6

0.8 0.7 0.7

0.50.6

0.8 0.8 0.9 0.9 0.8

1QFY

12

2QFY

12

3QFY

12

4QFY

12

1QFY

13

2QFY

13

3QFY

13

4QFY

13

1QFY

14

2QFY

14

3QFY

14

4QFY

14

1QFY

15

Asset Quality stable, PCR stable QoQ

4.4

4.1

3.8

3.6

3.5

3.5

3.3

3.2

3.2

3.1

3.1

3.0

3.1

1.0

0.9 0.

8

0.7

0.7

0.8

0.8

0.8

0.8

0.9

0.9

1.0

1.0

77 78 79 80 81 79 78 77 75 73 70 69 68

1QFY

12

1HFY

12

9MFY

12

FY12

1QFY

13

1HFY

13

9MFY

13

FY13

1QFY

14

1HFY

14

9MFY

14

FY14

1QFY

15

GNPA (%) NNPA (%) PCR (%)

Addition of INR14b to RL; pipeline of INR15b

19.7

25.0

30.7

45.5

41.7

44.5

45.8

53.2

59.2

68.3 86

.0

105.

6

112.

70.9 1.1

1.2 1.

8

1.6

1.6

1.6 1.8 2.

0

2.1 2.

6 3.1 3.2

1QFY

12

1HFY

12

9MFY

12

FY12

1QFY

13

1HFY

13

9MFY

13

FY13

1QFY

14

1HFY

14

9MFY

14

FY14

1QFY

15

Restructured loans (INR b) % of loans

Source: MOSL, Company

Profit contribution of different business segments (INR m)

Source: MOSL, Company

DuPont Quarterly: Higher non-core income compensated for lower fees

1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13 1QFY14 2QFY14 3QFY14 4QFY14 1QFY15 Net Interest Income 2.35 2.34 2.41 2.62 2.57 2.66 2.70 2.86 2.82 2.91 2.99 2.98 3.04 Fee income 1.54 1.59 1.51 1.46 1.33 1.35 1.36 1.33 1.32 1.43 1.40 1.35 1.31 Fee inc to Core income 39.56 40.41 38.55 35.76 34.03 33.64 33.61 31.82 31.94 33.03 31.94 31.18 30.12 Core Income 3.88 3.93 3.92 4.08 3.90 4.00 4.06 4.19 4.14 4.34 4.40 4.33 4.35 Operating Expenses 1.77 1.77 1.70 1.87 1.71 1.75 1.74 1.81 1.84 1.67 1.84 1.97 1.91 Cost to core Income 45.63 44.98 43.43 45.97 43.88 43.72 42.91 43.16 44.37 38.46 41.86 45.48 43.95

Employee 0.71 0.79 0.74 0.93 0.80 0.76 0.72 0.75 0.80 0.63 0.70 0.86 0.84 Others 1.06 0.98 0.96 0.94 0.92 0.99 1.02 1.06 1.03 1.04 1.14 1.11 1.07

Core Operating profits 2.11 2.16 2.22 2.20 2.19 2.25 2.32 2.38 2.30 2.67 2.56 2.36 2.44 Trading and others 0.06 0.04 0.17 0.42 0.19 0.26 0.34 0.33 0.51 0.12 0.57 0.69 0.62 Operating Profits 2.18 2.20 2.39 2.62 2.38 2.52 2.66 2.71 2.81 2.80 3.12 3.05 3.05 Provisions 0.44 0.30 0.30 0.40 0.38 0.40 0.28 0.35 0.44 0.45 0.49 0.49 0.49 PBT 1.73 1.90 2.09 2.23 2.00 2.12 2.38 2.36 2.37 2.35 2.63 2.56 2.56 Tax 0.44 0.50 0.55 0.62 0.54 0.57 0.64 0.63 0.70 0.66 0.85 0.74 0.77 RoA 1.30 1.40 1.54 1.60 1.46 1.54 1.73 1.73 1.68 1.69 1.78 1.82 1.80

Source: MOSL, Company

31 July 2014 9

ICICI Bank

Quarterly Snapshot FY13 FY14 FY15 Variation (%) INR m 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q QoQ YoY Profit and Loss Interest Income 95,457 100,263 101,383 103,653 104,207 108,133 114,550 114,893 117,669 2 13 Loans 64,558 68,488 70,658 69,707 71,956 77,369 82,238 82,716 83,922 1 17 Investment 27,019 27,445 27,424 28,204 28,846 28,391 29,222 29,112 29,772 2 3 Others 3,879 4,330 3,301 5,742 3,404 2,373 3,090 3,065 3,975 30 17 Interest Expenses 63,527 66,551 66,393 65,621 66,002 67,698 71,999 71,327 72,750 2 10 Net Interest Income 31,929 33,712 34,990 38,032 38,205 40,435 42,551 43,565 44,919 3 18 Other Income 18,799 20,430 22,146 22,082 24,843 21,665 28,010 29,761 28,498 -4 15 Trading profits -210 1,720 2,510 930 4,030 -790 4,470 2,450 3,880 58 -4 Fee Income 16,470 17,090 17,710 17,750 17,930 19,940 19,970 19,740 19,360 -2 8 Miscellaneous Income 2,539 1,620 1,926 3,402 2,883 2,515 3,570 7,571 5,258 -31 82 Total Income 50,729 54,142 57,136 60,114 63,048 62,100 70,561 73,326 73,417 0 16 Operating Expenses 21,235 22,209 22,612 24,073 24,906 23,221 26,170 28,791 28,250 -2 13 Employee 9,870 9,659 9,406 9,997 10,894 8,716 9,969 12,623 12,469 -1 14 Others 11,365 12,550 13,205 14,076 14,012 14,506 16,202 16,169 15,781 -2 13 Operating Profits 29,493 31,933 34,525 36,041 38,142 38,879 44,390 44,535 45,167 1 18 Provisions 4,659 5,079 3,687 4,600 5,932 6,248 6,946 7,138 7,261 2 22 PBT 24,835 26,854 30,838 31,441 32,210 32,631 37,444 37,397 37,906 1 18 Taxes 6,684 7,293 8,335 8,400 9,468 9,110 12,122 10,877 11,353 4 20 PAT 18,151 19,561 22,502 23,041 22,742 23,521 25,322 26,520 26,553 0 17 Asset Quality GNPA 99,110 100,510 98,030 96,470 100,570 100,780 104,480 105,540 110,010 4 9 NNPA 19,410 21,380 21,850 22,340 24,720 27,070 31,210 33,010 34,740 5 41 GNPA (%) 3.1 3.1 2.9 2.7 2.8 2.7 2.7 2.6 2.7 13 -7 NNPA (%) 0.6 0.7 0.6 0.6 0.7 0.7 0.8 0.8 0.9 5 18 PCR (Calculated, %) 80 79 78 77 75 73 70 69 68 -30 -700 GNPA - Retail 59,440 52,670 47,900 41,760 54,110 49,080 44,430 41,170 37,890 -8 -30 NNPA - Retail 6,820 5,990 5,930 5,240 7,760 7,620 7,800 8,170 8,460 4 9 Prov. for NPA in qtr 4,659 5,079 3,687 4,600 5,932 6,248 6,946 7,138 7,261 2 22 Credit Cost 0.7 0.7 0.5 0.6 0.8 0.8 0.9 0.9 0.8 0 4 Restructured loans 41,720 44,530 45,750 53,150 59,150 68,260 86,020 105,580 112,650 7 90 % of Loans 1.6 1.6 1.6 1.8 2.0 2.1 2.6 3.1 3.2 13 128 Ratios (%) Fees to Total Income 32.5 31.6 31.0 29.5 28.4 32.1 28.3 26.9 26.4 Cost to Core Income 41.7 42.4 41.4 40.7 42.2 36.9 39.6 40.6 40.6 Tax Rate 26.9 27.2 27.0 26.7 29.4 27.9 32.4 29.1 30.0 CASA 40.6 40.7 40.9 41.9 43.2 43.3 43.3 42.9 43.0 Dom. Loan/Deposit (Rep) 76.6 77.1 79.4 78.9 80.7 80.2 80.5 78.8 80.5 Loan / Deposit 100.2 97.7 100.1 99.2 103.5 102.8 104.9 102.0 103.4 RoA (cal) 1.5 1.5 1.7 1.7 1.7 1.7 1.8 1.8 1.8 RoE (Cal) 11.8 12.3 13.7 13.8 13.3 13.1 13.8 14.4 14.2 Margins - Cal (%) Yield on loans 9.9 10.1 10.1 9.7 9.7 10.0 10.1 9.9 9.8 -338 -177 Yield On Investments 6.9 7.0 6.8 6.7 6.7 6.6 6.9 6.7 6.9 -330 -196 Yield on Funds 8.8 9.0 8.7 8.7 8.6 8.7 9.0 8.7 8.8 -338 -190 Cost of funds 6.4 6.5 6.3 6.0 6.0 6.0 6.2 6.0 6.0 -338 -201 Margins 2.9 3.0 3.0 3.2 3.1 3.3 3.3 3.3 3.3 -315 -183 Margins - Reported 3.0 3.0 3.1 3.3 3.3 3.3 3.3 3.4 3.4 -309 -194 Franchise ATM 9,366 10,006 10,040 10,481 10,902 11,098 11,215 11,315 11,447 1 5 Branches 2,755 2,772 2,895 3,100 3,350 3,507 3,588 3,753 3,763 0 12

Source: MOSL, Company

31 July 2014 10

ICICI Bank

Quarterly Snapshot continues FY13 FY14 FY15 Variation (%) INR b 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q QoQ YoY Balance Sheet Loans 2,684 2,751 2,868 2,902 3,014 3,178 3,326 3,387 3,471 2 15 Investments 1,735 1,792 1,862 1,938 1,879 1,837 1,854 1,967 1,921 -2 2 Customer Assets 3,182 3,239 3,414 3,491 3,583 3,708 3,853 4,026 3,993 -1 11 Deposits 2,678 2,814 2,864 2,926 2,912 3,090 3,170 3,319 3,358 1 15 Borrowings 1,369 1,350 1,468 1,450 1,556 1,450 1,506 1,544 1,456 -6 -6 Total Assets 5,041 5,112 5,273 5,368 5,486 5,635 5,741 5,946 5,884 -1 7 Deposits Break Up CASA Deposits 1,087 1,144 1,171 1,226 1,258 1,339 1,372 1,424 1,444 1 15 % of total Deposits 41 41 41 42 43 43 43 43 43 Savings 779 806 815 857 889 935 957 991 1,027 4 16 % of total Deposits 29 29 28 29 31 30 30 30 31 Current 308 338 357 369 370 404 414 432 417 -4 13 % of total Deposits 11 12 12 13 13 13 13 13 12 Term Deposits 1,591 1,670 1,693 1,700 1,654 1,751 1,798 1,895 1,914 1 16 % of total Deposits 59 59 59 58 57 57 57 57 57 Loan Break Up SME Loans 153 143 149 151 139 146 143 149 153 2 10 Corporate Loans 868 935 982 943 979 1,035 1,047 1,020 1,057 4 8 Retail Loans 912 963 999 1,074 1,085 1,151 1,222 1,320 1,372 4 26 of which Housing 471 512 541 576 596 631 666 706 742 5 25 Personal Loans 10 9 11 16 18 24 31 40 47 18 153 Credit Cards 26 26 28 27 30 31 32 33 36 8 17 Others 405 416 420 455 441 465 494 541 547 1 24 International Loans 752 710 737 734 811 845 915 898 888 -1 10 Loan Mix Agriculture SME Loans 5.7 5.2 5.2 5.2 4.6 4.6 4.3 4.4 4.4 Corporate Loans 32.3 34.0 34.2 32.5 32.5 32.6 31.5 30.1 30.5 Retails 34.0 35.0 34.9 37.0 36.0 36.2 36.7 39.0 39.5 International Loans 28.0 25.8 25.7 25.3 26.9 26.6 27.5 26.5 25.6 Subsidiaries PAT (INR m) I Sec 100 80 280 160 130 180 350 250 610 144 369 I Sec PD 330 270 230 390 1,200 -760 480 400 460 15 -62 I Venture 6 1 0 193 190 1 1 139 110 -21 -42 Pru AMC 280 230 280 310 370 440 470 550 610 11 65 ICICI Home Finance 490 534 534 642 576 604 517 534 500 -6 -13 ICIC Life Insurance 3,490 3,960 3,970 3,540 3,640 3,870 4,280 3,880 3,820 -2 5 ICICI General Insurance 830 1,010 950 270 2,030 1,560 760 760 720 -5 -65 ICICI Bank 18,151 19,561 22,502 23,041 22,742 23,521 25,322 26,520 26,553 0 17 Consolidation adjustment -2,907 -1,746 -2,296 -3,626 -3,408 -2,435 -3,460 -5,793 -5,063 -13 49 Consol Profit 20,770 23,900 26,450 24,920 27,470 26,980 28,720 27,240 28,320 4 3

Source: MOSL, Company

31 July 2014 11

ICICI Bank

Financials: Valuation Matrix60.02 Rating CMP Mcap Dividend

(INR) (USDb) FY16 FY17 FY16 FY17 FY16 FY17 FY16 FY17 FY16 FY17 FY16 FY17 Yield (%) #ICICIBC* Buy 1,473 28.3 118 144 10.3 8.2 665 770 1.8 1.5 1.9 1.9 16.2 17.1 1.8HDFCB Buy 834 33.3 55 69 15.1 12.0 257 311 3.2 2.7 2.0 2.0 23.4 24.4 1.1AXSB Buy 392 3.1 35 42 11.0 9.3 218 253 1.8 1.5 1.7 1.7 17.4 17.9 1.2KMB* Neutra l 954 12.2 47 57 20.3 16.7 319 375 3.0 2.5 1.8 1.9 13.6 14.6 0.1YES Buy 541 3.7 59 76 9.2 7.1 328 388 1.7 1.4 1.7 1.7 19.4 21.2 1.5IIB Buy 560 4.9 43 54 13.1 10.4 228 272 2.5 2.1 1.9 1.9 20.4 21.6 0.9VYSB Buy 610 1.9 45 56 13.4 10.9 437 481 1.4 1.3 1.2 1.2 10.8 12.2 1.1FB Buy 120 0.3 13 16 9.4 7.6 99 111 1.2 1.1 1.1 1.2 13.5 14.9 1.8J&KBK Buy 1,598 1.3 280 305 5.7 5.2 1,576 1,798 1.0 0.9 1.4 1.3 19.0 18.1 3.6SIB Buy 30 0.7 4.3 5.3 7.1 5.7 30 34 1.0 0.9 0.9 0.9 15.0 16.5 2.4Private Aggregate 89.8 11.7 9.5 2.0 1.7SBIN (cons)* Buy 2,440 30.3 344 454 6.7 5.1 2,378 2,749 1.0 0.8 0.9 1.0 15.6 17.9 1.7PNB Buy 956 5.8 184 229 5.2 4.2 1,249 1,451 0.8 0.7 1.0 1.1 15.8 17.0 1.6BOI Neutra l 275 2.9 60 76 4.6 3.6 478 545 0.6 0.5 0.5 0.6 13.3 14.8 2.2BOB Buy 871 6.2 155 181 5.6 4.8 992 1,131 0.9 0.8 0.8 0.8 16.6 17.0 3.1CBK Buy 400 3.1 81 107 4.9 3.7 626 709 0.6 0.6 0.6 0.7 13.6 16.1 3.1UNBK Buy 191 2.0 34 39 5.6 4.9 319 351 0.6 0.5 0.5 0.5 11.3 11.7 2.2OBC Buy 278 1.4 55 73 5.1 3.8 502 558 0.6 0.5 0.6 0.7 11.4 13.7 3.2INBK Buy 149 1.2 28 32 5.3 4.6 288 312 0.5 0.5 0.6 0.6 10.1 10.7 3.2CRPBK Neutra l 354 1.0 62 74 5.7 4.8 687 745 0.5 0.5 0.4 0.4 9.3 10.4 2.3ANDB Neutra l 82 0.8 13 13 6.4 6.2 165 174 0.5 0.5 0.4 0.3 8.0 7.9 3.3IDBI Neutra l 89 2.4 14 20 6.2 4.5 157 173 0.6 0.5 0.6 0.7 9.5 11.9 1.8DBNK Neutra l 69 0.6 16 19 4.4 3.6 141 156 0.5 0.4 0.6 0.6 11.6 12.8 3.8Public Aggregate 59.1 6.8 5.4 0.8 0.7HDFC* Buy 1,067 27.8 40 47 17.1 12.7 166 193 4.1 3.1 2.5 2.5 24.4 25.5 1.5LICHF Buy 290 2.4 32 39 8.9 7.4 198 229 1.5 1.3 1.4 1.4 17.6 18.4 1.7DEWH Buy 355 0.8 68 85 5.2 4.2 367 431 1.0 0.8 1.5 1.5 20.0 21.3 3.0IDFC Neutra l 152 3.8 14 16 11.1 9.8 109 121 1.1 1.0 2.5 2.5 12.5 13.0 1.8RECL Buy 306 5.0 66 78 4.6 3.9 299 359 1.0 0.9 3.4 3.4 24.1 23.8 3.7POWF Buy 268 5.9 60 70 4.5 3.8 297 349 0.9 0.8 3.2 3.1 21.9 21.6 4.1SHTF Buy 899 3.4 90 105 9.9 8.5 514 604 1.7 1.5 2.6 2.8 18.5 19.5 0.9MMFS Neutra l 235 2.2 19 23 12.1 10.4 116 132 2.0 1.8 2.7 2.7 17.8 18.3 1.6BAF Buy 2,206 1.8 199 234 11.1 9.4 1,107 1,303 2.0 1.7 2.9 2.7 19.4 19.4 1.5NBFC Aggregate 53.2 10.9 9.2 2.1 1.8*Multiples adj. for value of key ventures/Investments; For ICICI Bank and HDFC Ltd BV is adjusted for investments in subsidiaries

# Div Yield based on FY13 decleared dividend; UR: Under Review

EPS (INR) P/E (x) BV (INR) RoA (%) RoE (%)P/BV (x)

EPS: MOSL forecast v/s consensus (INR) MOSL Consensus Variation Forecast Forecast (%)

FY15 97.2 96.7 0.5

FY16 117.8 114.2 3.2

Shareholding pattern (%)

Jun-14 Mar-14 Jun-13

Promoter 0.0 0.0 0.0

DII 23.2 15.5 22.9

FII 69.3 10.2 68.5

Others 7.6 7.8 8.6 Notes: FII includes depository receipts

Stock performance (1-year)

700

900

1,100

1,300

1,500

Jul-13 Oct-13 Jan-14 Apr-14 Jul-14

ICICI Bank Sensex - Rebased

31 July 2014 12

ICICI Bank

Financials and valuation

31 July 2014 13

ICICI Bank

N O T E S

31 July 2014 14

ICICI Bank

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Disclosure of Interest Statement ICICI BANK LTD Analyst ownership of the stock No

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