ICICI Bank Result Updated

8/2/2019 ICICI Bank Result Updated

1/15

Please refer to important disclosures at the end of this report 1

Particulars (` cr) 4QFY12 3QFY12 % chg (qoq) 4QFY11 % chg (yoy)NII 2,712 2,506 8.2 2,312 17.3Pre-prov. profit 2,687 2,354 14.2 2,343 14.7

PAT 1,728 1,503 15.0 1,437 20.3Source: Company, Angel Research

ICICI Bank reported healthy performance for 4QFY2012. Net profit for the bankgrew by 20.3% yoy to `1,728cr. Key highlights of the results were a) 33bpsequential increase in domestic NIMs mainly driven by no securitization losses during

the quarter and full impact of base rate hike and b) continued improvement in asset

quality front. We maintain our Buy view on the stock.NIMs and asset quality, both improved: During the quarter, advances for the bankincreased by healthy 17.3% yoy (3.1% qoq), aided by a strong 29.5% yoy (16.2%

qoq) growth in SME book, 26.6% yoy growth in corporate book and 26.0% yoy

growth in Overseas book (excl. positive impact of INR depreciation 10.4% yoy).

Deposits accretion moderated with growth of 13.2% yoy (sequential decline of 2.0%),

mainly on account of subdued current deposits growth and moderate 13.7% yoy

saving deposits growth. Consequentially, CASA ratio declined 160bp yoy (10bp qoq)

to 43.5%. Domestic NIMs improved by 33bp sequentially to 3.3%; while, Overseas

NIMs improved by 12bp qoq to 1.5%. Non-interest income (excl. treasury) increased

by only 12.7% yoy, on back of moderation in corporate fee income. Misc. other

income for the bank grew to `342cr from `46cr in 4QFY2011, aided mainly by

higher dividend income of ~`175cr. The banks asset quality improvementcontinued during this quarter as well, with both gross and net NPA ratio decliningsequentially by 20bp and 10bp, respectively. Provision coverage ratio remainedhealthy at 80.4%. The banks restructured book grew by`1,186cr (38.6% qoq) to`4,256cr, in line with the management guidance and primarily included accounts

such as GTL and 3i Infotech. The management indicated that no major restructuring

is in the pipeline. They also specified that based on their past experiences, slippages

from restructured assets is ~5%.

Outlook and valuation: The banks substantial branch expansion in the past 3-4 yearsis expected to sustain a far more favourable deposit mix going forward. Moreover, a

lower risk balance sheet has driven down NPA provisioning costs, which we believe

will enable RoE of 16% by FY2014E (with further upside from financial leverage). At

the CMP, the banks core banking business (after adjusting for subsidiaries) is trading

at 1.5x FY2014E ABV (including subsidiaries, at 1.4x FY2014E ABV). We maintain ourBuy recommendation on the stock with a target price of `1,183.Key financialsY/E March (` cr) FY2011 FY2012 FY2013E FY2014ENII 9,017 10,734 13,180 15,462% chg 11.1 19.0 22.8 17.3

Net profit 5,151 6,465 7,843 9,369% chg 28.0 25.5 21.3 19.5

NIM (%) 2.6 2.7 2.8 2.8

EPS (`) 44.7 56.0 67.9 81.1P/E (x) 19.4 15.5 12.8 10.7

P/ABV (x) 1.8 1.7 1.5 1.4

RoA (%) 1.3 1.4 1.5 1.5

RoE (%) 11.7 13.5 14.7 16.0

Source: Company, Angel Research

BUYCMP `869

Target Price `1,183

Investment Period 12 Months

Stock Info

Sector Banking

Market Cap (` cr) 99,858

Beta 1.3

52 Week High / Low 1119/641

Avg. Daily Volume 653,759

Face Value (`) 10

BSE Sensex 17,187

Nifty 5,209

Reuters Code ICBK.BO

Bloomberg Code ICICIBC@IN

Shareholding Pattern (%)

Promoters -

MF / Banks / Indian Fls 26.9

FII / NRIs /

OCBs

62.8

Indian Public / Others 10.3

Abs. (%) 3m 1yr 3yr

Sensex (0.3) (10.9) 56.2

ICICI Bank (2.2) (22.2) 97.8

Vaibhav Agrawal022 3935 7800 Ext: 6808

[email protected]

Varun Varma022 3935 7800 Ext: 6847

[email protected]

Sourabh Taparia022 3935 7800 Ext: 6872

[email protected]

ICICI BankPerformance Highlights

4QFY2012 Result Update | Banking

April 28, 2012


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ICICI Bank | 4QFY2012 Result Update

April 28, 2012 2

Exhibit 1:4QFY2012 performanceParticulars (` cr) 4QFY12 3QFY12 % chg (qoq) 4QFY11 % chg (yoy)Interest earned 9,175 8,592 6.8 7,156 28.2- on Advances / Bills 6,128 5,686 7.8 4,535 35.1- on investments 2,615 2,473 5.8 2,209 18.4

- on balance with RBI & others 128 134 (4.6) 91 40.5

- on others 303 299 1.2 321 (5.6)

Interest Expended 6,070 5,880 3.2 4,647 30.6Net Interest Income 3,105 2,712 14.5 2,510 23.7Other income 2,228 1,892 17.8 1,641 35.8Other income excl. treasury 2,070 1,957 5.8 1,837 12.7

- Fee income 1,728 1,701 1.6 1,791 (3.5)

- Treasury income 158 (65) (343.1) (196) (180.6)

- Other income 342 256 33.8 46 649.9

Operating income 5,333 4,604 15.8 4,150 28.5Operating expenses 2,222 1,917 15.9 1,845 20.4- Employee expenses 1,103 837 31.9 857 28.8

- Other Opex 1,119 1,080 3.6 989 13.1

Pre-provision Profit 3,112 2,687 15.8 2,305 35.0Provisions & Contingencies 469 341 37.6 384 22.3PBT 2,642 2,346 12.6 1,921 37.5Provision for Tax 741 618 19.8 469 57.8PAT 1,902 1,728 10.0 1,452 31.0Effective Tax Rate (%) 28.0 26.3 169bp 24.4 360bp


Exhibit 2:4QFY2012 Actual vs. estimatesParticulars (` cr) Actual Estimates Var. (%)Net interest income 3,105 2,844 9.2

Other income 2,228 2,032 9.7

Operating income 5,333 4,875 9.4Operating expenses 2,222 2,051 8.3

Pre-prov. profit 3,112 2,824 10.2Provisions & cont. 469 476 (1.5)

PBT 2,642 2,348 12.5

Prov. for taxes 741 629 17.7

PAT 1,902 1,719 10.7Source: Company, Angel Research


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April 28, 2012 3

Exhibit 3:4QFY2012 performance analysisParticulars 4QFY12 3QFY12 % chg (qoq) 4QFY11 % chg (yoy)Balance sheetAdvances (`cr) 253,728 246,157 3.1 216,366 17.3Deposits (`cr) 255,500 260,589 (2.0) 225,602 13.3

Credit-to-Deposit Ratio (%) 99.3 94.5 484bp 95.9 340bp

Current deposits (`cr) 34,973 40,039 (12.7) 34,878 0.3

Saving deposits (`cr) 76,046 73,498 3.5 66,869 13.7

CASA deposits (` cr) 111,019 113,537 (2.2) 101,747 9.1

CASA ratio (%) 43.5 43.6 (12)bp 45.1 (165)bp

CAR (%) 18.5 18.9 (36)bp 19.5 (102)bp

Tier 1 CAR (%) 12.7 13.1 (45)bp 13.2 (49)bp

Profitability Ratios (%)Reported NIM 3.0 2.7 31bp 2.7 27bp

Cost-to-income ratio 41.7 41.6 2bp 44.5 (281)bp

Asset qualityGross NPAs (` cr) 9,475 9,723 (2.5) 10,034 (5.6)

Gross NPAs (%) 3.6 3.8 (20)bp 4.5 (85)bp

Net NPAs (`cr) 1,861 2,048 (9.1) 2,407 (22.7)

Net NPAs (%) 0.7 0.8 (10)bp 1.1 (38)bp

Provision Coverage Ratio (%) 80.4 78.9 150bp 76.0 439bp

Provision exps. to avg. assets (%) 0.4 0.3 10bp 0.4 2bp


Overall NIMs improve 27bp sequentially

During 4QFY2012, advances for the bank increased by healthy 17.3% yoy (3.1%

qoq), aided by a strong 29.5% yoy (16.2% qoq) growth in SME book, 26.6% yoy

growth in corporate book and 26.0% yoy growth in Overseas book (excl. the

positive impact of INRs depreciation, the growth in international advances would

have been much lower at 10.4% yoy). Rural segment loans grew at 6.4% yoy

(27.8% qoq on account of year ending phenomena of higher priority sector

lending in the last quarter). Retail loans grew by 7.6% yoy (9.2% qoq), partly due

to the banks conscious strategy to reduce the share of unsecured personal and

credit card loans. Personal loans came off by a sharp 57.7% yoy, while credit card

debt declined by 8.7% yoy. Secured vehicle and housing advances grew by 18.0%

and 6.9% yoy, respectively. Consequently, the retail segments overall contribution

to the advances book came at 35.5% as of 4QFY2012 as against 38.7% as of

4QFY2011 (33.5% in 3QFY2012).

Deposits accretion moderated during the quarter with growth of 13.2% yoy

(sequential decline of 2.0%), mainly on account of subdued current deposits

growth and moderate 13.7% saving deposits growth. Consequentially, credit to

deposit ratio for the bank rose sharply to 99.3% in 4QFY2012 from 95.9% in

4QFY2011 and 94.5% in 3QFY2012. Muted growth in current deposits and

moderate growth in saving deposits led the CASA ratio for the bank to decline

160bp yoy (10bp sequentially) to 43.5%.


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April 28, 2012 4

Reported overall NIM improved by 27bp sequentially to 3.01%, on account of

improvement in both domestic and international NIMs. Domestic NIMs improved

by 33bp qoq to 3.3%, aided by higher investment income on account of no

securitization loss during the quarter and higher yield on advances on account offull impact of base rate hike. Overseas NIM improved by 12bp qoq to 1.52%

mainly on account of higher yield on advances.

Going ahead, Management expects the banks domestic loan book to grow by

~20% in FY2013 mainly driven by corporate and secured retail loans. They

anticipate the banks consolidation in overseas loan book to continue in current

year as well. According to the management, while 1QFY2013 NIMs are likely to

be sequentially lower due to priority sector lending, overall NIMs are expected to

improve by 10-15bp in FY2013 as compared to FY2012.

Exhibit 4:Consolidation in unsecured retail advances continueParticulars (` cr) 4QFY12 3QFY12 % chg (qoq) 4QFY11 % chg (yoy) % to totalRural 22,328 17,477 27.8 20,987 6.4 8.8

Overseas 69,521 69,663 (0.2) 55,173 26.0 27.4

Corporate 58,357 64,986 (10.2) 46,086 26.6 23.0

SME 13,448 11,569 16.2 10,386 29.5 5.3

Retail 90,073 82,463 9.2 83,734 7.6 35.5

- Housing 57,647 54,755 5.3 53,924 6.9 22.7

- Vehicle 26,572 22,182 19.8 22,524 18.0 10.5

- Personal 991 990 0.1 2,345 (57.7) 0.4

- Credit cards 2,522 2,474 1.9 2,763 (8.7) 1.0

- Other retail 2,342 2,062 13.6 2,177 7.6 0.9Total Advances 253,728 246,157 3.1 216,366 17.3 100.0Source: Company, Angel Research

Exhibit 5:CDR picks due to moderation in deposits gr.


Exhibit 6:CASA ratio remain flat sequentially


96 96 95 9499

60

70

80

90

100

110

(3.0)

-

3.0

6.0

9.0

4QFY11 1QFY12 2QFY12 3QFY12 4QFY12

Adv. qoq growth Dep. qoq growth CDR (%, RHS)

45.1

41.9

42.1

43.6

43.5

20.8

14.2

5.1

18.0

9.1

-

5.0

10.0

15.0

20.0

25.0

5.0

15.0

25.0

35.0

45.0


CASA ratio (%) CASA yoy growth (%)


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April 28, 2012 5

Exhibit 7:NIMs improve sharply by 27bp qoq


Exhibit 8:NII growth trends


Feeincome moderation continues

During 4QFY2012, non interest income excl. treasury for the bank increased by

12.7% yoy to `2,070cr, on back of moderation in fee income. Fee income

declined by 3.5% yoy due to moderation in corporate fee income despite traction

witnessed in income from transaction banking and remittance segments. Treasury

income came in at `158cr as against loss of `196cr in 4QFY2011, on account of

higher proprietary trading income and improved performance on equity portfolio,

despite MTM losses on security receipts. Other income for the bank grew to `342cr

from `46cr in 4QFY2011, mainly aided by dividend income of `100cr received

from ICICI Bank UK and ~`75cr from its life insurance subsidiary.

Going ahead, the management expects fee income growth to be in low double

digits in FY2013, on account of, continued traction anticipated in transaction

banking and remittance business; while stabilization expected in corporate fee

income.

Exhibit 9:Other Income aided by dividends from subsidiariesParticulars (` cr) 4QFY12 3QFY12 % chg (qoq) 4QFY11 % chg (yoy)Fee income 1,728 1,701 1.6 1,791 (3.5)

Treasury 158 (65) (343.1) (196) (180.6)

Others 342 256 33.6 46 648.9

Other income 2,228 1,892 17.8 1,641 35.8Other income excl. treasury 2,070 1,957 5.8 1,837 12.7


2.7

2.6 2.6

2.7

3.0

2.2

2.4

2.6

2.8

3.0


NIM (Reported, %)

23.321.1

13.7

17.3

23.7

-

5.0

10.0

15.0

20.0

25.0

2,000

2,150

2,300

2,450

2,600

2,750

2,9003,050

3,200


NII (` cr) YoY growth (%, RHS)


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April 28, 2012 6

Exhibit 10:Fee income moderation continues


Exhibit 11:Still healthy share of fee income in RoA


Asset quality continues to improve

The banks asset quality improvement continued during 4QFY2012 as well,

with both gross and net NPA ratio declining sequentially by 20bp and 10bp,

respectively. As of 4QFY2012 gross NPA ratio stands at 3.6% (3.8% in

3QFY2012), while net NPA ratio stands at 0.7% (0.8% in 3QFY2012).

Provision coverage ratio for the quarter remained healthy at 80.4%.

Gross slippages ratio for FY2012 stood at 1.36%. During the quarter, the banks

restructured book grew by `1,186cr (38.6% qoq) to `4,256cr, in line with the

management guidance and primarily included accounts such as GTL and 3i

Infotech. The management indicated that no major restructuring is in the pipeline.

They also specified that based on their past experiences, slippages fromrestructured assets is ~5%. Further they guided for credit cost to be 75bp for

FY2013.

Exhibit 12:Restructured loans rise during 4QFY2012


Exhibit 13:Declining NPAs with improving coverage


Operating costs rise due to higher employee bonus provisions

Operating expenses increased by 20.5% yoy (16.0% qoq), primarily due to

increase of `267cr in employee expenses on the back of higher bonus provisions.

Consequently, the operating expenses to average assets ratio increased to 1.9%in 4QFY2012 compared to 1.8% in 4QFY2011 and 1.7% in 3QFY2012.

Cost-to-income ratio also inched up sequentially by 10bp to 41.7%. The

management expects to contain cost-to-income ratio below 42% in FY2013.

1,7

91

1,5

78

1,7

00

1,7

01

1,7

28

17.8

11.7

6.9 4.7

(3.5)

(10.0)

(5.0)

-

5.0

10.0

15.0

20.0

1,400

1,500

1,600

1,700

1,800

1,900


Fee Income (` cr) yoy growth (%, RHS)

1.8

1.51.6

1.5 1.5

1.0

1.2

1.4

1.6

1.8

2.0


Fee income to average assets (%)

1,970 1,966

2,501

3,070

4,256

-

750

1,500

2,250

3,000

3,750

4,500


(`cr)

4.5

4.4

4.1

3.8

3.6

1.1

1.0

0.9

0.8

0.7

76.0 76.978.2 78.9

80.4

60.0

65.0

70.0

75.0

80.0

85.0

-

1.0

2.0

3.0

4.0

5.0


Gross NPAs (%) Net NPAs (%) Coverage ratio (%, RHS)


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April 28, 2012 7

Exhibit 14:Staff expenses increased Total Opex


Exhibit 15:Opex to avg assets ratio increase in 4QFY12


Under-leveraged branch networkThe number of branches for the bank has almost doubled over the past three

years. Branch network improvement was partly aided by the merger with the Bank

of Rajasthan. This extensive pan India network of 2752 branches as of 4QFY2012

is under-leveraged, as reflected in the falling CASA deposits/branch of ~`40cr

compared to `65cr as of 3QFY2008 and the total assets/branch of `172cr

compared to `394cr as of 3QFY2008.

Further, management plans to maintain the branch addition rate in the range of

200-300 in coming year as well. Going forward, we expect the bank to leverage

this network to grow its CASA market share.

Exhibit 16:Robust branch expansion


Exhibit 17:Under-leveraged branch network


Overview of performance of subsidiaries

Consolidated net profit for FY2012 rose by a healthy 25.4% yoy to `7,643cr(ex ICICI General additional third party motor pool losses, consolidated net

profit would have grown by 33.6% to `8,146cr).

Consolidated reported RoEs for FY2012 improved to 13.0% from 11.6% inFY2011. However, overseas subsidiaries of the bank (viz. ICICI Bank Canada

and ICICI Bank UK) continue to remain a drag on the consolidated RoEs, as

both remain over capitalized, reflecting banks strategy of consolidating their

989

1,0

87

1,0

50

1,0

80

1,1

19

857

733

843

837

1,1

03

-

10.0

20.0

30.0

-

500

1,000

1,500

2,000

2,500


Other opex Staff exps Opex yoy growth (RHS)

(`cr) (%)

44.5

44.9

44.6

41.6

41.7

1.81.8 1.8

1.7

1.9

1.4

1.5

1.6

1.7

1.8

1.9

2.0

30.0

35.0

40.0

45.0

50.0


Cost-to-income ratio (%) Opex to avg assets (%, RHS)

1,3

08

1,4

38

1,7

41

2,5

29

2,7

52

-

450

900

1,350

1,800

2,250

2,700

3QFY08

4QFY08

1QFY09

2QFY09

3QFY09

4QFY09

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

-

10

20

30

40

50

60

70

-

90

180

270

360

450

3QFY08

4QFY08

1QFY09

2QFY09

3QFY09

4QFY09

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

Total Assets/Branch (` cr) CASA Deposi ts/Branch (` cr, RHS)


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April 28, 2012 8

operations (CAR in excess of 31% in both), and profitability continue to decline

for ICICI Bank UK (US$ 25.4mn in FY2012 vs. US$ 36.6mn in FY2011).

The bank received ~`100cr as dividend from its UK subsidiary in 4QFY2012and similar discussions are in progress with the Canadian regulator. In the

short term, we expect the over-capitalized subsidiaries to drag the

consolidated RoEs.

ICICI Prudential Life reported PAT of `1,384cr for FY2012 (growth of 72.4%yoy) and maintained its leadership position with a market share based on

retail weighted received premium of 5.9%.

ICICI Lombard General Insurance reported loss after tax of `416cr forFY2012 (vs. loss after tax of `80cr in FY2011) after recognizing additional

third party motor pool losses of `685cr. Management expects the company to

turn profitable in FY2013, despite some more impact of third party motor poolliabilities on account of actuarial valuation anticipated in FY2013.

FY2012 performance for other smaller subsidiaries was mixed. ICICI securitiesPD and ICICI AMC reported PAT growth of 62.3% and 22.2%, respectively.

While ICICI securities and ICICI ventures reported PAT de-growth of 31.9%

and 8.1%, respectively.

Exhibit 18:Performance of subsidiariesSubsidiary Parameter FY2012 FY2011 % chgICICI Bank UK PAT (USD mn) 25.4 36.6 (30.6)

ICICI Bank Canada PAT (CAD mn) 34.4 32.4 6.2

ICICI Bank Eurasia PAT (USD mn) 4.3 - -

ICICI Home Finance PAT (`cr) 260 233 11.6

ICICI Prudential Life Insurance APE (`cr) 3,118 3,975 (21.6)

NBP (`cr) 500 713 (29.9)

NBP margin (%) 16.0 17.9 (10.6)

AuM (`cr) 70,771 68,150 3.8

PAT (`cr) 1,384 808 71.3

ICICI Lombard Gen. Insurance Gross Premium (`cr) 5,358 4,408 21.6

PAT (`cr) (416) (80) -

ICICI Securities PAT (`cr) 77 113 (31.9)

ICICI Securities PD PAT (`cr) 86 53 62.3

ICICI Venture PAT (`cr) 68 74 (8.1)

ICICI Prudential AMC PAT (`cr) 88 72 22.2



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April 28, 2012 9

Investment arguments

Well positioned to garner strong market share gains in CASA

deposits

In our view, the banks substantial branch expansion from 955 branches at the

end of 3QFY2008 to 2,752 branches by 4QFY2012, and strong capital adequacy,

at 18.5% (Tier-I at 12.7%) have positioned it to gain both CASA and credit market

share, respectively. In fact, the bank has once again started gaining market share

in savings accounts since FY2010. During FY2011, the bank improved its market

share of savings deposits by 10bp over FY2010, capturing a substantial 5.8%

incremental market share.

Improved deposit mix to lead to better NIM

The banks strategic transformation has expectedly resulted in significantly better

balance sheet and earnings quality. The distinguishing feature of the banks

performance in FY2010 was the improvement in CASA ratio to 42.1%

(transformative considering that the ratio was as low as 22% at the end of FY2007

and 29% even as recently as FY2009). CASA ratio has remained healthy at 43.5%

even in 4QFY2012. Apart from the paradigm shift in the deposit mix reflected in its

43.5% CASA ratio, the bank has largely exited unattractive business segments such

as small-ticket personal loans in the domestic segment and most non-India related

exposures in its international business.

Asset quality trends remain healthy

The banks asset quality continues to show further improvement, with a declining

trend in additions to gross as well as net NPAs. For FY2012 gross slippages ratio

stood at comfortable ~1.36%. Also, the bank has maintained a comfortable

provision coverage ratio of 80.4% in 4QFY2012. Though the banks restructured

loans increased by 38.6% qoq during the quarter to `4,256cr, the management

indicated that no major restructuring is in the pipeline. Management also specified

that based on their past experiences, slippages from restructured assets is ~5%.

The reduction in risk profile of advances has expectedly resulted in commensurate

decline in NPA provisioning costs and reflected in improved RoA from 1.0% in

FY2010 to 1.4% in FY2012.

Valuations attractive

We have a positive view on ICICI Bank, given its market-leading businesses across

the financial services spectrum. Moreover, we believe the bank is decisively

executing a strategy of consolidation, which has resulted in an improved deposit

and loan mix and should drive improved operating metrics over the medium term.

The banks substantial branch expansion in the past 3-4 years is expected to

sustain a far more favourable deposit mix going forward. Moreover, a lower risk

balance sheet has driven down NPA provisioning costs, which we believe will drive

21.3% yoy growth in net profit for FY2013E and enable RoE of 16.0% by FY2014E

(with further upside from financial leverage).

At the CMP, the banks core banking business (after adjusting `134/share towards

value of the subsidiaries) is trading at 1.5x FY2014E ABV (including subsidiaries,


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April 28, 2012 10

the stock is trading at 1.4x FY2014E ABV). We value the banks subsidiaries at

`134/share and the core bank at `1,049/share (2.1x FY2014E ABV).

We maintain our Buy rating on the stock with a target price of `1,183.Exhibit 19:SOTP valuation summaryParticulars Target multiple Value/share (`)ICICI Bank 2.1x FY2014E ABV 1,049

Life Insurance 15.5x FY2014E NBP 60

General Insurance 12x FY2012 PAT 12

Others (Home Fin, AMC, VC, SecuritiesSecurities PD and Overseas subsidiaries)

62

SOTP value 1,183Source: Angel Research

Exhibit 20:Key assumptionsParticulars (%) Earlier estimates Revised estimatesFY2013 FY2014 FY2013 FY2014Credit growth 21.0 22.0 18.0 23.0

Deposit growth 22.0 22.0 19.0 23.0

CASA ratio 44.3 44.0 43.5 42.9

NIMs 2.6 2.6 2.8 2.8

Other income growth 26.4 21.8 20.7 22.8

Growth in staff expenses 20.0 22.0 22.0 22.0

Growth in other expenses 20.0 22.0 15.0 18.0

Slippages 1.7 1.7 1.5 1.6Treasury gain/(loss) (% of investments) 78.0 75.0 80.0 75.0

Source: Angel Research

Exhibit 21:Change in estimatesParticulars (` cr) FY2013 FY2014Earlierestimates Revisedestimates Var. (%) Earlierestimates Revisedestimates Var. (%)NII 12,418 13,180 6.1 14,941 15,462 3.5

Non-interest income 9,191 9,029 (1.8) 11,164 11,051 (1.0)

Operating income 21,609 22,209 2.8 26,105 26,512 1.6Operating expenses 9,216 9,274 0.6 11,244 11,115 (1.1)

Pre-prov. profit 12,393 12,935 4.4 14,862 15,397 3.6Provisions & cont. 1,701 1,782 4.7 1,777 1,790 0.8

PBT 10,691 11,153 4.3 13,085 13,607 4.0

Prov. for taxes 3,168 3,311 4.5 4,069 4,238 4.2

PAT 7,524 7,843 4.2 9,016 9,369 3.9Source: Angel Research


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April 28, 2012 11

Exhibit 22:Angel EPS forecast vs. consensusYear (`) Angel forecast Bloomberg consensus Var. (%)FY2013E 67.9 64.6 5.1

FY2014E 81.1 76.9 5.5Source: Bloomberg, Angel Research

Exhibit 23:P/ABV band


Exhibit 24:P/E band


-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Apr-02

Sep-0

2

Feb-0

3

Jul-03

Dec-0

3

May-0

4

Oct-04

Mar-05

Aug-0

5

Jan-0

6

Jun-0

6

Nov-0

6

Apr-07

Sep-0

7

Feb-0

8

Jul-08

Dec-0

8

May-0

9

Oct-09

Mar-10

Aug-1

0

Jan-1

1

Jun-1

1

Nov-1

1

Apr-12

Sep-1

2

Feb-1

3

Price (`) 1x 1.5x 2x 2.5x 3x

0

400

800

1,200

1,600

2,000

2,400

2,800

Apr-05

Aug-05

Dec-05

Apr-06

Aug-06

Dec-06

Apr-07

Aug-07

Dec-07

Apr-08

Aug-08

Dec-08

Apr-09

Aug-09

Dec-09

Apr-10

Aug-10

Dec-10

Apr-11

Aug-11

Dec-11

Apr-12

Price (`) 7x 17x 27x 37x


12/15


April 28, 2012 12

Exhibit 25:ICICI Bank Premium/Discount to the Sensex

Source: Bloomberg, Angel Research

Exhibit 26:Recommendation summaryCompany Reco. CMP(`) Tgt. price(`) Upside(%) FY2014EP/ABV (x) FY2014ETgt P/ABV (x) FY2014EP/E (x) FY2012-14EEPS CAGR (%) FY2014ERoA (%) FY2014ERoE (%)AxisBk Buy 1,121 1,587 41.6 1.5 2.2 8.1 16.4 1.5 20.3

FedBk Neutral 417 - - 1.0 1.0 7.3 13.0 1.3 14.5

HDFCBk Neutral 543 - - 3.1 3.3 15.3 27.0 1.7 22.1

ICICIBk* Buy 869 1,183 36.1 1.4 1.9 10.7 20.4 1.5 16.0SIB Neutral 24 - - 1.0 1.1 6.0 6.7 0.9 17.7

YesBk Buy 350 470 34.3 1.8 2.4 8.4 22.5 1.4 23.3

AllBk Buy 165 205 24.9 0.6 0.8 4.0 (2.1) 1.0 17.0

AndhBk Accumulate 115 125 8.6 0.7 0.8 4.3 6.5 1.0 16.7

BOB Buy 764 943 23.4 0.9 1.1 5.0 12.2 1.1 19.2

BOI Buy 337 392 16.2 0.9 1.0 5.2 21.3 0.8 16.5

BOM Buy 51 62 21.0 0.6 0.8 3.8 26.8 0.9 17.5

CanBk Buy 430 532 23.6 0.7 0.9 4.5 10.9 0.9 16.7

CentBk Neutral 95 - - 0.8 0.8 4.8 45.7 0.5 13.8

CorpBk Buy 410 508 23.9 0.6 0.7 3.7 2.5 0.8 16.2

DenaBk Buy 91 118 29.6 0.6 0.7 3.6 6.2 0.9 16.9

IDBI# Buy 101 117 15.2 0.6 0.7 4.2 22.7 0.9 14.8

IndBk Accumulate 213 240 12.8 0.7 0.8 4.4 5.4 1.2 18.2IOB Buy 87 104 19.8 0.5 0.7 4.1 29.9 0.6 13.9

J&KBk Neutral 895 - - 0.8 0.8 4.6 8.8 1.4 18.6

OBC Buy 242 296 22.7 0.5 0.7 4.0 17.1 0.8 13.6

PNB Buy 839 1,138 35.6 0.8 1.1 4.7 8.8 1.1 18.5

SBI* Buy 2,131 2,593 21.7 1.3 1.6 7.9 23.6 1.0 19.1

SynBk Buy 101 128 26.9 0.6 0.8 3.7 8.7 0.8 17.2

UcoBk Neutral 76 - - 0.7 0.8 4.0 7.7 0.7 16.2

UnionBk Buy 219 266 21.5 0.7 0.9 4.4 27.2 0.8 17.4

UtdBk Buy 65 87 33.9 0.5 0.7 3.0 11.4 0.7 16.0

VijBk Neutral 57 - - 0.7 0.7 4.9 14.2 0.5 13.2

Source: Company, Angel Research; Note:*Target multiples=SOTP Target Price/ABV (including subsidiaries), #Without adjusting for SASF

(40)

(20)

0

20

40

60

80

100

Apr-06

Aug-0

6

Dec-0

6

Apr-07

Aug-0

7

Dec-0

7

Apr-08

Aug-0

8

Dec-0

8

Apr-09

Aug-0

9

Dec-0

9

Apr-10

Aug-1

0

Dec-1

0

Apr-11

Aug-1

1

Dec-1

1

Apr-12

Premium/Discount to Sensex Avg. Historical Premium(%)


13/15


April 28, 2012 13

Income statement

Y/E March (` cr) FY09 FY10 FY11 FY12 FY13E FY14ENet Interest Income 9,092 8,114 9,017 10,734 13,180 15,462- YoY Growth (%) 10.9 (10.8) 11.1 19.0 22.8 17.3Other Income 7,783 7,478 6,648 7,503 9,029 11,051- YoY Growth (%) (12.3) (3.9) (11.1) 12.9 20.3 22.4

Operating Income 16,875 15,592 15,665 18,237 22,209 26,512- YoY Growth (%) (1.2) (7.6) 0.5 16.4 21.8 19.4

Operating Expenses 7,045 5,860 6,617 7,850 9,274 11,115- YoY Growth (%) (13.6) (16.8) 12.9 18.6 18.1 19.8

Pre - Provision Profit 9,830 9,732 9,048 10,387 12,935 15,397- YoY Growth (%) 10.1 (1.0) (7.0) 14.8 24.5 19.0

Prov. & Cont. 5,048 4,390 2,290 1,583 1,782 1,790- YoY Growth (%) 30.4 (13.0) (47.8) (30.9) 12.5 0.5

Profit Before Tax 4,782 5,342 6,758 8,803 11,153 13,607- YoY Growth (%) (5.4) 11.7 26.5 30.3 26.7 22.0

Prov. for Taxation 1,359 1,317 1,606 2,338 3,311 4,238- as a % of PBT 28.4 24.7 23.8 26.6 29.7 31.1

PAT 3,423 4,025 5,151 6,465 7,843 9,369- YoY Growth (%) (17.7) 17.6 28.0 25.5 21.3 19.5

Balance sheetY/E March (` cr) FY09 FY10 FY11 FY12 FY13E FY14EShare Capital 1,463 1,465 1,502 1,505 1,505 1,505- Equity 1,113 1,115 1,152 1,155 1,155 1,155

- Preference 350 350 350 350 350 350

Reserve & Surplus 48,420 50,503 53,939 59,250 63,695 69,010

Deposits 218,348 202,017 225,602 255,500 304,045 373,975

- Growth (%) (10.7) (7.5) 11.7 13.3 19.0 23.0

Borrowings 67,324 60,947 72,813 90,027 103,851 123,522

Tier 2 Capital 25,482 32,967 36,391 49,788 50,784 51,800

Other Liab. & Prov. 18,265 15,501 15,987 17,577 20,588 25,428

Total Liabilities 379,301 363,400 406,234 473,647 544,468 645,241Cash Balances 17,536 27,514 20,907 20,461 18,243 22,439

Bank Balances 12,430 11,359 13,183 15,768 18,189 21,635

Investments 103,058 120,893 134,686 159,560 180,962 200,173

Advances 218,311 181,206 216,366 253,728 299,399 368,260

- Growth (%) (3.2) (17.0) 19.4 17.3 18.0 23.0

Fixed Assets 3,802 3,213 4,744 4,615 5,164 5,957

Other Assets 24,164 19,215 16,347 19,515 22,512 26,776

Total Assets 379,301 363,400 406,234 473,647 544,468 645,241- Growth (%) (6.3) (4.4) 12.1 17.3 15.4 18.9


14/15


April 28, 2012 14

Ratio analysis

Y/E March FY09 FY10 FY11 FY12 FY13E FY14EProfitability ratios (%)NIMs 2.6 2.4 2.6 2.7 2.8 2.8Cost to Income Ratio 41.7 37.6 42.2 43.0 41.8 41.9

RoA 0.9 1.0 1.3 1.4 1.5 1.5

RoE 9.2 9.7 11.7 13.5 14.7 16.0

B/S ratios (%)CASA Ratio 28.7 41.7 45.1 43.5 43.5 42.9

Credit/Deposit Ratio 100.0 89.7 95.9 99.3 98.5 98.5

CAR 15.5 19.4 19.5 18.5 22.2 19.8

- Tier I 11.8 14.0 13.2 12.7 12.3 11.3

Asset Quality (%)Gross NPAs 4.3 5.1 4.5 3.6 3.7 3.8

Net NPAs 2.1 2.1 1.1 0.7 0.8 1.0

Slippages 2.2 1.5 1.5 1.4 1.5 1.6

Loan Loss Prov. /Avg. Assets 1.0 1.2 0.5 0.3 0.3 0.3

Provision Coverage 52.8 59.5 76.0 80.4 80.0 75.0

Per Share Data (`)EPS 30.7 36.1 44.7 56.0 67.9 81.1

ABVPS (75% cover.) 425.7 449.8 478.3 522.9 561.4 607.4

DPS 11.0 12.0 14.0 18.5 22.5 27.0

Valuation RatiosPER (x) 28.3 24.1 19.4 15.5 12.8 10.7

P/ABVPS (x) 2.0 1.9 1.8 1.7 1.5 1.4

Dividend Yield 1.3 1.4 1.6 2.1 2.6 3.1

DuPont AnalysisNII 2.4 2.3 2.4 2.5 2.7 2.7

(-) Prov. Exp. 1.3 1.2 0.6 0.4 0.4 0.3

Adj. NII 1.1 1.0 1.8 2.1 2.3 2.3

Treasury 0.5 0.2 (0.1) (0.0) 0.0 0.0

Int. Sens. Inc. 1.5 1.2 1.7 2.1 2.3 2.4

Other Inc. 1.6 1.8 1.7 1.7 1.7 1.8

Op. Inc. 3.1 3.0 3.5 3.8 4.0 4.2

Opex 1.9 1.6 1.8 1.8 1.9 1.9PBT 1.3 1.4 1.7 2.0 2.2 2.2

Taxes 0.4 0.4 0.4 0.5 0.7 0.7

RoA 0.9 1.0 1.3 1.4 1.5 1.5Leverage 10.1 9.5 9.2 9.5 9.9 10.6

RoE 9.2 9.7 11.7 13.5 14.7 16.0


15/15


Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com

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