ICICI Bank :Q4FY12 First Cut: GEPL

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 ICICI Bank Q4FY12 highlights - Improving margins and declining NPAs should impact stock positively

• The bank reported growth of 31.0% Y-o-Y in PAT in Q4FY12 vs market expectation of 22% Y-o-Y .
•  Net Interest Income grew by 23.7% Y-o-Y in Q4FY12 vs expectation of 14.5% Y-o-Y.
•  NIM ha has improved to 3.01% in Q4FY12 vs 2.74% in Q4FY11. This is the biggest positive for the bank as till now other banks have shown decline in margins Y-o-Y basis. NIM was up on sequential basis as NIM for Q3FY12 stood at 2.7%.
•  Non-interest income has grown by 35.8% Y-o-Y basis which is a positive indicator for the bank vs market expectation of 30%.
•  Advances have grown by 17.3% Y-o-Y in Q4FY12 vs expectation of 18%.
•  Deposits grew by 13.3% Y-o-Y in Q4FY12 whereas they declined by 2.0% sequentially.
•  CASA ratio has remained stable at43.5% in Q4FY12. This is the positive catalyst for the bank as banking industry is experience fall in CASA growth.
•  Asset quality has improved Y-o-Y as well as sequentially. GNPA stood at 3.6% in Q4FY12 vs 3.8% in Q3FY12 and 4.47% in Q4FY12.

Key developments

• Cost to income ratio stood at 41.7%in Q4FY12 vs 44.5% in Q4FY11 and 41.6% in Q3FY12.
• PCR stood at 80.4% in Q4FY12 vs 78.9% in Q3FY12. PCR improved on account of fall in GNPAs.
•  CAR for the bank stood at healthy level of 18.5%.
•  Restructured loan book at net level is Rs42.56 bn as on March 2012.

Outlook and View Point  

The company has reported good set of numbers on earnings part as well as improving asset quality which are the major concerns for the banking industry. The bank's numbers are above market expectations. We expect the result to put positive impact on the stock considering improvement in asset quality.