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ICICI Bank (ICBK.BO; Rs1,049.35; 2M)
Takeaways from Mumbai — ICICI Bank management presented at our India
Conference in Mumbai today. Below are key takeaways:
Loan growth in-line with industry levels - ICICI Bank management suggested
loan growth is likely to remain in-line with industry levels (19-20% for FY12). Key
drivers for loan growth are likely to come from increased demand from foreign
currency loans by corporates (to take advantage of lower funding costs abroad,
even on a fully hedged basis) as well as a healthy growth in the infrastructure
and domestic corporate segments. Retail loan growth likely to be lagging overall
portfolio growth at around 15-17%, especially due to moderation in mortgage
growth.
Funding growth to remain strong - While funding remains a key focus area for
ICBK, management expects its strong branch additions in last 2 yrs (close to
1500 of 2500 branches added since FY09) should lead to continued deposit
growth momentum, especially as these branches move up the productivity curve.
CASA ratio is currently above 45% levels, could moderate slightly, but more
medium term targets to maintain it above 40% levels, even with a higher balance
sheet growth.
Credit costs likely to decline in FY12 - ICBK management remains fairly
confident of the improvements in its asset quality performance and expects credit
costs to fall further to around 80bps for FY12. Management believes ICBK's
exposure to infrastructure segments are not under significant stress due to its
careful project and risk procedures, though there could be some slippages in the
microfinance segment (Rs 10bn exposure).
Cost ratios to remain stable - ICBK management expected operating costs to
remain largely stable with cost/asset ratio of around 1.7%. While there has been
some increase in employee costs last year - part of this was a catch-up due to
relatively lower wage growth in the previous years, should moderate going
forward.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
ICICI Bank (ICBK.BO; Rs1,049.35; 2M)
Takeaways from Mumbai — ICICI Bank management presented at our India
Conference in Mumbai today. Below are key takeaways:
Loan growth in-line with industry levels - ICICI Bank management suggested
loan growth is likely to remain in-line with industry levels (19-20% for FY12). Key
drivers for loan growth are likely to come from increased demand from foreign
currency loans by corporates (to take advantage of lower funding costs abroad,
even on a fully hedged basis) as well as a healthy growth in the infrastructure
and domestic corporate segments. Retail loan growth likely to be lagging overall
portfolio growth at around 15-17%, especially due to moderation in mortgage
growth.
Funding growth to remain strong - While funding remains a key focus area for
ICBK, management expects its strong branch additions in last 2 yrs (close to
1500 of 2500 branches added since FY09) should lead to continued deposit
growth momentum, especially as these branches move up the productivity curve.
CASA ratio is currently above 45% levels, could moderate slightly, but more
medium term targets to maintain it above 40% levels, even with a higher balance
sheet growth.
Credit costs likely to decline in FY12 - ICBK management remains fairly
confident of the improvements in its asset quality performance and expects credit
costs to fall further to around 80bps for FY12. Management believes ICBK's
exposure to infrastructure segments are not under significant stress due to its
careful project and risk procedures, though there could be some slippages in the
microfinance segment (Rs 10bn exposure).
Cost ratios to remain stable - ICBK management expected operating costs to
remain largely stable with cost/asset ratio of around 1.7%. While there has been
some increase in employee costs last year - part of this was a catch-up due to
relatively lower wage growth in the previous years, should moderate going
forward.
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