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UBS Investment Research
ICICI Bank
N IM beat but fees muted
Event: Q1 results in line with UBS-e
Q1FY12 net profit at Rs13.3 (+30% y/y) came in line while better margins
supported NII growth of 21%y/. Other highlights: 1) loans grew 20%y/y, 2%q/q, 2)
Average CASA improved 1% point q/q to 40%, 3) fee income grew 12% y/y, 4)
asset quality remained stable with net NPA at 94bp and provision coverage
marginally inched up to 77%, 5) MFI slippage of Rs2bn out of total slippage of
Rs7.5bn, 6) it has converted shares pledged as security to acquire 30% stake in a
borrower company called GTL Ltd.
Impact: Maintain estimates
We expect growth of 18% CAGR over FY12-13 with 25 bps improvement in
NIMs over next 12 months due to better international margins and reduction in
securitization losses. We bring down Fee growth for FY12/13 to 18% from 20%
earlier. We are building in LLP at 80bps/90bps in FY12/13.
Action: Buy Rating, PT 1350
We expect earnings to grow at 21% CAGR and consol earnings at 26% CAGR
over FY12-13. We continue to like ICICI Bank for its improving metrics and
relatively better asset quality among peers. The stock trades at 15x FY12
consolidated earnings and 1.8x book (adj for subs).
Valuation: Preferred pick in the sector
We value the company on sum of the parts method. We roll over to mid FY13 and
at our price target of Rs1350, the standalone business trades at 2.3x FY13 book and
16.7x FY13 standalone earnings. We value its subsidiaries at Rs320 per share.
ICICI Bank
ICICI Bank is the largest private sector bank and the second largest bank in
India. It has an asset base of Rs3.66trn. The bank had a network of 1,520
branches at the end of October 2009.
Statement of Risk
We believe a sustained economic slowdown could impact the banking and
finance sector on several fronts: lead to a slowdown in credit, increase NPL risk,
impact fee income, and exert pressure on NIM.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
ICICI Bank
N IM beat but fees muted
Event: Q1 results in line with UBS-e
Q1FY12 net profit at Rs13.3 (+30% y/y) came in line while better margins
supported NII growth of 21%y/. Other highlights: 1) loans grew 20%y/y, 2%q/q, 2)
Average CASA improved 1% point q/q to 40%, 3) fee income grew 12% y/y, 4)
asset quality remained stable with net NPA at 94bp and provision coverage
marginally inched up to 77%, 5) MFI slippage of Rs2bn out of total slippage of
Rs7.5bn, 6) it has converted shares pledged as security to acquire 30% stake in a
borrower company called GTL Ltd.
Impact: Maintain estimates
We expect growth of 18% CAGR over FY12-13 with 25 bps improvement in
NIMs over next 12 months due to better international margins and reduction in
securitization losses. We bring down Fee growth for FY12/13 to 18% from 20%
earlier. We are building in LLP at 80bps/90bps in FY12/13.
Action: Buy Rating, PT 1350
We expect earnings to grow at 21% CAGR and consol earnings at 26% CAGR
over FY12-13. We continue to like ICICI Bank for its improving metrics and
relatively better asset quality among peers. The stock trades at 15x FY12
consolidated earnings and 1.8x book (adj for subs).
Valuation: Preferred pick in the sector
We value the company on sum of the parts method. We roll over to mid FY13 and
at our price target of Rs1350, the standalone business trades at 2.3x FY13 book and
16.7x FY13 standalone earnings. We value its subsidiaries at Rs320 per share.
ICICI Bank
ICICI Bank is the largest private sector bank and the second largest bank in
India. It has an asset base of Rs3.66trn. The bank had a network of 1,520
branches at the end of October 2009.
Statement of Risk
We believe a sustained economic slowdown could impact the banking and
finance sector on several fronts: lead to a slowdown in credit, increase NPL risk,
impact fee income, and exert pressure on NIM.
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