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ICICI Bank Ltd.
BLOOMBERG: ICICIBC IN EQUITY | BSE: 532174 | NSE: ICICIBANK
In-line performance
ICICI Bank’s (ICICIBC’s) Q4FY11 results were largely in line with our estimates.
NII grew by 23% YoY; however, total income growth was muted at 6% YoY due to
treasury losses on security receipts and the equity portfolio. Total advances grew
4.7% QoQ driven by international, rural, SME and auto segments. NIMs expanded
10bps QoQ on account of upward re-pricing of assets and penalty charges on early
redemption of term deposits. Asset quality continued to improve with GNPA/NNPA
declining from 4.75%/1.39% in Q3FY11 to 4.47%/1.11% in Q4FY11. Total credit
cost by 17% QoQ to 3.8bn. We remain neutral on the bank despite improvement in
its core performance as we believe the stock is fairly valued at 2.1x FY12BV and
15.4x FY12EPS (adj. for subsidiaries), given the lower than industry ROEs of 14%
over FY11–FY13E. Muted operating performance of key subsidiaries (insurance and
overseas banking subsidiaries) would also limit any significant upsides.
Advances growth lower than industry: Advances grew by 4.7% YoY driven by the
international (up 9.4% QoQ), rural (up 37% QoQ), SME (up 20% QoQ) and auto
segments (up 15% QoQ). However, loans disbursed to the corporate segment
declined 14% QoQ. While total deposit growth was muted at 3.6% QoQ, growth in
CASA deposits was robust at 9%. As a result, CASA proportion improved to 45%.
NIMs improve marginally: NIMs improved by 10bps QoQ to 2.7% due to a 10bps
expansion in domestic NIMs (to 3.1%). Domestic NIMs expanded on a ~100bps hike
in PLR/base rate and penalty charges on early redemption of term deposits to avail
locking at higher rates (this had a 6bps–7bps impact on NIMs). However, we believe
domestic NIMs could decline going forward as asset re-pricing benefits are already
in the base and costs of funds would likely increase further.
Other income lower; costs up on higher employee expenses: Fee income growth
was strong at 18% YoY; however, treasury losses of Rs 1.96bn from security
receipts and the equity portfolio resulted in a 6% QoQ decline in other income. C/I
ratio increased from 42.3% in Q3FY11 to 44.5% in Q4FY11 due to higher employee
expenses on account of bonus payouts.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
ICICI Bank Ltd.
BLOOMBERG: ICICIBC IN EQUITY | BSE: 532174 | NSE: ICICIBANK
In-line performance
ICICI Bank’s (ICICIBC’s) Q4FY11 results were largely in line with our estimates.
NII grew by 23% YoY; however, total income growth was muted at 6% YoY due to
treasury losses on security receipts and the equity portfolio. Total advances grew
4.7% QoQ driven by international, rural, SME and auto segments. NIMs expanded
10bps QoQ on account of upward re-pricing of assets and penalty charges on early
redemption of term deposits. Asset quality continued to improve with GNPA/NNPA
declining from 4.75%/1.39% in Q3FY11 to 4.47%/1.11% in Q4FY11. Total credit
cost by 17% QoQ to 3.8bn. We remain neutral on the bank despite improvement in
its core performance as we believe the stock is fairly valued at 2.1x FY12BV and
15.4x FY12EPS (adj. for subsidiaries), given the lower than industry ROEs of 14%
over FY11–FY13E. Muted operating performance of key subsidiaries (insurance and
overseas banking subsidiaries) would also limit any significant upsides.
Advances growth lower than industry: Advances grew by 4.7% YoY driven by the
international (up 9.4% QoQ), rural (up 37% QoQ), SME (up 20% QoQ) and auto
segments (up 15% QoQ). However, loans disbursed to the corporate segment
declined 14% QoQ. While total deposit growth was muted at 3.6% QoQ, growth in
CASA deposits was robust at 9%. As a result, CASA proportion improved to 45%.
NIMs improve marginally: NIMs improved by 10bps QoQ to 2.7% due to a 10bps
expansion in domestic NIMs (to 3.1%). Domestic NIMs expanded on a ~100bps hike
in PLR/base rate and penalty charges on early redemption of term deposits to avail
locking at higher rates (this had a 6bps–7bps impact on NIMs). However, we believe
domestic NIMs could decline going forward as asset re-pricing benefits are already
in the base and costs of funds would likely increase further.
Other income lower; costs up on higher employee expenses: Fee income growth
was strong at 18% YoY; however, treasury losses of Rs 1.96bn from security
receipts and the equity portfolio resulted in a 6% QoQ decline in other income. C/I
ratio increased from 42.3% in Q3FY11 to 44.5% in Q4FY11 due to higher employee
expenses on account of bonus payouts.
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