ICICI Bank - 1QFY13 Results Update - Motilal Oswal

ICICI Bank's 1QFY13 PAT grew 36% YoY to INR18.2b (6% higher than est.). Strong loan growth, stable margins and asset quality were the key positives. Key highlights:

- Loans grew 22% YoY and 6% QoQ, led by strong traction in domestic corporate (up 28% YoY and 15% QoQ), SME (up 29% YoY and 6% QoQ) and international (up 35% YoY and 8% QoQ) loans. Excluding the impact of currency depreciation, international loans grew 8% YoY. NIM remained flat QoQ at 3% despite higher share of priority sector loans. Domestic NIM remained stable QoQ at 3.3%; international NIM improved 9bp QoQ to 1.6%.

- In percentage terms, GNPAs declined QoQ to 3.54% on the back of (1) continued low net slippages in retail loans, and (2) no major shocks in corporate loans. Restructured loans declined by INR840m QoQ to INR41.7b (1.6% of loans), led by sell-down of loans to Kingfisher Airlines.

- Fee income grew just 4.4% YoY, impacting overall non-interest income growth (+ 14% YoY; - 16% QoQ). However, ICICI Canada started paying dividends from 1QFY13 (INR1.33b), aiding weak non-interest income performance.

Valuation and view: RoA is likely to remain strong at ~1.6% over FY13/14, whereas core RoE should increase from 11% over FY08-12 to ~16% in FY14, led by increasing leverage and strong RoA. ICICI Bank has maintained strong capitalization, with tier-I at 12.8%. Retain as top pick.

Source : Equity Bulls

Keywords