Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Steady growth and quality
Representing ICICI Bank at the IF, Mr. NS Kannan (ED and CFO) and
Rakesh Jha (Dy. CFO) highlighted that during FY12, bank targets ~18%
growth in loans led by the corporate segment. Bank is highly focussed on
liability structure (CASA ratio) and profitability (ROA). Management is
comfortable with the quality of loans in the power and commercial real
estate sectors; SME exposure is low. Overseas exposures have declined in
past two years and are mostly to Indian corporate groups.
Targeting 18% loan growth with stable CASA ratio
During FY12, management expects to achieve ~18% growth in loans driven
by growth in corporate loans, both domestic and overseas. Growth in retail
segment will be led by mortgages, but will lag overall growth. A key change in
strategy vis-à-vis past cycle is that loan growth targets are linked closely to
liability structure and profitability. Bank plans to maintain CASA ratio ~40%
and targets to keep credit costs low (targeting 80bps). Healthy ROA and rise
in leverage will drive expansion in ROE over next 2-3 years.
Margins to be stable in FY12 and may expand in FY13
Management believes that during FY12 margins are likely to be stable YoY at
2.6% (~3% domestic and ~85bps overseas). Margins may expand in FY13
led by rise in average CASA ratio and repricing of forex assets. Improvement
in competitive/ pricing environment in domestic market is a positive.
Limited risk in power and real estate exposures; SME share is low
Power sector loans form 4.5% of ICICI’s total loans and less than 7% of total
exposures. The management highlighted that loans were granted after careful
evaluation of sponsor’s track-record, fuel availability, offtake agreement and
tariffs. Moreover, their sensitivity analysis indicates adequate debt-service
coverage ratio (DSCR) under cases of substantially lower PLF and higher
imported coal than originally assumed. Commercial real estate exposures
form 4% of total and comprise of developer financing, loans against property
and balance sheet financing where part security/ takeout is from CRE. Loans
are backed by cash flows from projects as well as adequate security cover.
Share of SME is just 5% of loans, two-thirds of retail loans are mortgages and
MFI exposure is down to Rs10bn of which 75% may be restructured.
Lower and de-risked international portfolio
The total assets of UK and Canadian Banking subsidiaries have declined by
20-30% since Jun-09. The investment in bonds/ notes of FIs in ICICI UK has
declined from US$2.1bn in Jun-09 to US$640m and there is no exposure to
peripheral Europe. Bank plans to get the capital back from some overseas
subsidiaries and has started conversation with regulators. CDS exposures
have more than halved to Rs21bn and are mostly to Indian corporate.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Steady growth and quality
Representing ICICI Bank at the IF, Mr. NS Kannan (ED and CFO) and
Rakesh Jha (Dy. CFO) highlighted that during FY12, bank targets ~18%
growth in loans led by the corporate segment. Bank is highly focussed on
liability structure (CASA ratio) and profitability (ROA). Management is
comfortable with the quality of loans in the power and commercial real
estate sectors; SME exposure is low. Overseas exposures have declined in
past two years and are mostly to Indian corporate groups.
Targeting 18% loan growth with stable CASA ratio
During FY12, management expects to achieve ~18% growth in loans driven
by growth in corporate loans, both domestic and overseas. Growth in retail
segment will be led by mortgages, but will lag overall growth. A key change in
strategy vis-à-vis past cycle is that loan growth targets are linked closely to
liability structure and profitability. Bank plans to maintain CASA ratio ~40%
and targets to keep credit costs low (targeting 80bps). Healthy ROA and rise
in leverage will drive expansion in ROE over next 2-3 years.
Margins to be stable in FY12 and may expand in FY13
Management believes that during FY12 margins are likely to be stable YoY at
2.6% (~3% domestic and ~85bps overseas). Margins may expand in FY13
led by rise in average CASA ratio and repricing of forex assets. Improvement
in competitive/ pricing environment in domestic market is a positive.
Limited risk in power and real estate exposures; SME share is low
Power sector loans form 4.5% of ICICI’s total loans and less than 7% of total
exposures. The management highlighted that loans were granted after careful
evaluation of sponsor’s track-record, fuel availability, offtake agreement and
tariffs. Moreover, their sensitivity analysis indicates adequate debt-service
coverage ratio (DSCR) under cases of substantially lower PLF and higher
imported coal than originally assumed. Commercial real estate exposures
form 4% of total and comprise of developer financing, loans against property
and balance sheet financing where part security/ takeout is from CRE. Loans
are backed by cash flows from projects as well as adequate security cover.
Share of SME is just 5% of loans, two-thirds of retail loans are mortgages and
MFI exposure is down to Rs10bn of which 75% may be restructured.
Lower and de-risked international portfolio
The total assets of UK and Canadian Banking subsidiaries have declined by
20-30% since Jun-09. The investment in bonds/ notes of FIs in ICICI UK has
declined from US$2.1bn in Jun-09 to US$640m and there is no exposure to
peripheral Europe. Bank plans to get the capital back from some overseas
subsidiaries and has started conversation with regulators. CDS exposures
have more than halved to Rs21bn and are mostly to Indian corporate.
No comments:
Post a Comment