2026-03-20 15:23:59
SBI to sell stake in SBI Funds Management Ltd in its IPO
JSW Cement Ltd commissions greenfield cement plant in Nagaur
Artson Ltd receives order worth Rs. 42.22 crores
Firstsource Introduces Intelligence That Operates
IREDA Enhances Borrowing Limits to Rs 35,800 Cr for FY26Research
ICICI Bank - Asset quality continues its improving trend - Karvy
Posted On : 2012-07-30 10:37:26( TIMEZONE : IST )
ICICI Bank's operating numbers are in line with our expectations with stable sequential NIMs of 3.0% and credit growth of 21%. GNPA improved by 8 bps sequentially to 3.5% resulting in lower provisions. Slippage was slightly up sequentially at 1.3%. Fee Income has grown by 4% reflecting moderation in corporate activity. It received first dividend from Canadian subsidiaries of Rs1.3bn and from life insurance subsidiary of Rs0.8bn. After security receipt write-off of Rs1bn, it made a treasury loss of Rs0.2bn.
- Higher credit growth driven by corporate and international segment: Credit grew at a higher rate of 21% primarily driven by corporate/SME book growth of 28% and international book growth on account of rupee depreciation. Retail book has grown only by 10%. Management has guided higher growth in retail to compensate for lower growth in international book going ahead.
- NIMs maintained sequentially: It was able to maintain NIMs sequentially at 3.0%; however, it improved by 40bps as against last year. Improvement in NIMs is seen across domestic as well as international segment. Average CASA was maintained sequentially at 39.1%. Management has guided full year NIMs of 3.0%.
- Improvement in asset quality continues: Asset quality improved further with gross NPAs declining 8bps sequentially to 3.5%, with slippages contained at 1.3% for the quarter. Provision coverage is comfortable at 80.4%. Restructured book flat sequentially at 1.6% of loan book. The management continues its credit costs guidance, including restructuring related provision, to be within 0.75% for FY13E.
Outlook & Valuation
At the CMP, the stock trades at 13.1x and 12.2x FY13E and FY14E earnings, and at 1.6x and 1.5x P/ABV FY13E and FY14E, respectively. Stripping off value of subsidiaries, it is trading at 9.6x P/E FY14E and 1.2x P/ABV FY13E, which we feel is cheap considering its pan-India presence, asset quality comfort and improving ROE. We continue to maintain a BUY rating on the stock, retaining our price target of Rs1,110 based on P/ABV of 1.5x FY14E and Rs200 for its subsidiary.
