icici bank 4q fy 2013

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

Particulars (` cr) 4QFY13 3QFY13 % chg (qoq) 4QFY12 % chg (yoy)NII 3,803 3,499 8.7 3,105 22.5Pre-prov. profit 3,604 3,452 4.4 3,112 15.8

PAT 2,304 2,250 2.4 1,902 21.2Source: Company, Angel Research

ICICI Bank delivered a healthy performance for 4QFY2013, with net profit growth of21.2% yoy. On the operating front, the bank witnessed a healthy 22.5% yoy growth inits Net interest Income; however, disappointment on the non-interest income(excl. treasury) front, which grew at a muted 2.2% yoy, limited the operating profitgrowth to 15.8% yoy. On the asset quality front, the bank reported sequentially stable

NPA ratios and incremental restructuring at ~`

800cr, which is on guided lines.Business growth moderates; NIMs improve sequentially by 26bp: During 4QFY2013,the banks advances grew by 14.4% yoy, aided by a strong 30.0% yoy growth inthe domestic corporate book, due to bulky short term lending done earlier duringthe year. Growth in the retail portfolio was moderate at 11.4% yoy, as buyouts weresignificantly lower this year. On the deposits front, the bank witnessed growth of 14.5% yoy. CASA accretion was lower than peers at 10.4% yoy, primarily aided by savingsdeposits, which increased by 12.6% yoy, even as current deposits grew at a subduedpace of 5.6% yoy. The CASA ratio declined by around 150bp yoy to 41.9%. Thereported overall NIM improved by 26bp qoq to 3.3%, mainly on account of a 23bpsequential improvement in the domestic NIM to 3.7%, while international NIMsremained stable sequentially at 1.3%. Growth in Non-interest income (excludingtreasury) came in modest at 2.2% yoy, as corporate fee income was down more than

30% yoy. During the quarter, the bank registered treasury gains of `93cr (primarilybond gains, with the equity portfolio witnessing MTM losses) as against `158cr in4QFY2012. On the asset quality front, the bank reported flat Gross and net NPA ratioat 3.2% and 0.8%, respectively. During the quarter, the bank restructured loans worth`788cr, on guided lines, thereby taking its restructured book to`5,315cr. As per theManagement, advances worth`700cr remain in the pipeline for restructuring.

Outlook and valuation: The banks substantial branch expansion in the past threeto four years and strong capital adequacy has positioned it to grow at least by afew percentage points higher than the average industry growth. Moreover, alower risk balance sheet has driven down NPA provisioning costs. Furtherimprovement in risk adjusted NIMs and higher growth is expected to drive a15.5% CAGR in net profit over FY2013-15 and enable a RoE of 15.6% byFY2015E (with further upside from financial leverage). At the current market price,

the banks core banking business (after adjusting `158/share towards value ofthe subsidiaries) is trading at 1.71x FY2015E ABV (including subsidiaries, thestock is trading at 1.66x FY2015E ABV). We value the banks subsidiaries at`158/share and the core bank at `1,195/share (2.1x FY2015E ABV). Werecommend Buy rating on the stock with a target price of `1,352.Key financials (Standalone)Y/E March (` cr) FY2012 FY2013 FY2014E FY2015ENII 10,734 13,866 16,472 19,472% chg 19.0 29.2 18.8 18.2

Net profit 6,465 8,325 9,676 11,104% chg 25.5 28.8 16.2 14.8

NIM (%) 2.7 3.0 3.1 3.2

EPS (`) 56.1 72.2 83.9 96.2P/E (x) 20.5 16.0 13.7 12.0

P/ABV (x) 2.2 2.0 1.8 1.7

RoA (%) 1.3 1.5 1.5 1.5

RoE (%) 12.8 14.6 15.2 15.6

Source: Company, Angel Research

BUYCMP `1,152

Target Price `1,352

Investment Period 12 Months

Stock Info

Sector Banking

Market Cap (`cr) 132,935

Beta 1.3

52 Week High / Low 1231/767

Avg. Daily Volume 290705

Face Value (`) 10

BSE Sensex 19,388Nifty 5,904

Reuters Code ICBK.BO

Bloomberg Code ICICIBC@IN

Shareholding Pattern (%)

Promoters -

MF / Banks / Indian Fls 24.2

FII / NRIs / OCBs 67.3

Indian Public / Others 8.6

Abs. (%) 3m 1yr 3yr

Sensex (3.0) 12.8 10.8

ICICI Bank (4.0) 32.6 22.0

Vaibhav Agrawal022 3935 7800 Ext: 6808

[email protected]

Sourabh Taparia022 3935 7800 Ext: 6872

[email protected]

Akshay Narang022 3935 7800 Ext: 6829

[email protected]

Harshal Patkar022 3935 7800 Ext: 6847

[email protected]

ICICI BankPerformance Highlights

4QFY2013 Result Update | Banking

April 29, 2013

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ICICI Bank | 4QFY2013 Result Update

April 29, 2013 2

Exhibit 1:4QFY2013 performance (Standalone)Particulars (` cr) 4QFY13 3QFY13 % chg (qoq) 4QFY12 % chg (yoy) FY2013 FY2012 % chg (yoy)Interest earned 10,365 10,138 2.2 9,175 13.0 40,076 33,543 19.5- on Advances / Bills 6,971 7,066 (1.3) 6,128 13.7 27,341 22,130 23.5- on investments 2,820 2,742 2.8 2,615 7.8 11,009 9,684 13.7

- on balance with RBI & others 134 136 (1.4) 128 5.0 543 491 10.6

- on others 440 194 127.0 303 45.2 1,182 1,238 (4.5)

Interest Expended 6,562 6,639 (1.2) 6,070 8.1 26,209 22,809 14.9Net Interest Income 3,803 3,499 8.7 3,105 22.5 13,866 10,734 29.2Other income 2,208 2,215 (0.3) 2,228 (0.9) 8,346 7,503 11.2Other income excl. treasury 2,115 1,964 7.7 2,070 2.2 7,851 7,515 4.5

- Fee income 1,775 1,771 0.2 1,728 2.7 6,902 6,707 2.9

- Treasury income 93 251 (62.9) 158 (41.1) 495 (12) -

- Other income 340 193 76.6 342 (0.7) 949 808 17.4

Operating income 6,011 5,714 5.2 5,333 12.7 22,212 18,237 21.8Operating expenses 2,407 2,261 6.5 2,222 8.4 9,013 7,850 14.8- Employee expenses 1,000 941 6.3 1,103 (9.4) 3,893 3,515 10.8

- Other Opex 1,408 1,321 6.6 1,119 25.8 5,120 4,335 18.1

Pre-provision Profit 3,604 3,452 4.4 3,112 15.8 13,199 10,386 27.1Provisions & Contingencies 460 369 24.8 469 (2.0) 1,803 1,583 13.9

PBT 3,144 3,084 2.0 2,642 19.0 11,397 8,803 29.5Provision for Tax 840 834 0.8 741 13.4 3,071 2,338 31.4

PAT 2,304 2,250 2.4 1,902 21.2 8,325 6,465 28.8Effective Tax Rate (%) 26.7 27.0 (31)bp 28.0 (131)bp 26.9 26.6 39bp


Exhibit 2:4QFY2013 Actual vs estimatesParticulars (` cr) Actual Estimates Var. (%)Net interest income 3,803 3,704 2.7

Other income 2,208 2,360 (6.4)

Operating income 6,011 6,063 (0.9)Operating expenses 2,407 2,474 (2.7)

Pre-prov. profit 3,604 3,590 0.4Provisions & cont. 460 382 20.4

PBT 3,144 3,207 (2.0)Prov. for taxes 840 867 (3.1)

PAT 2,304 2,340 (1.5)Source: Company, Angel Research

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Exhibit 3:4QFY2013 performance analysis (Standalone)Particulars 4QFY13 3QFY13 % chg (qoq) 4QFY12 % chg (yoy)Balance sheetAdvances (`cr) 290,249 286,766 1.2 253,728 14.4Deposits (`cr) 292,614 286,418 2.2 255,500 14.5

Credit-to-Deposit Ratio (%) 99.2 100.1 (93)bp 99.3 (11)bp

Current deposits (`cr) 36,926 35,674 3.5 34,973 5.6

Saving deposits (`cr) 85,651 81,463 5.1 76,046 12.6

CASA deposits (`cr) 122,577 117,137 4.6 111,019 10.4

CASA ratio (%) 41.9 40.9 99bp 43.5 (156)bp

CAR (%) 18.7 19.5 (79)bp 18.5 22bp

Tier 1 CAR (%) 12.8 13.3 (45)bp 12.7 12bp

Profitability Ratios (%)Reported NIM 3.3 3.1 26bp 3.0 32bp

Cost-to-income ratio 40.0 39.6 47bp 41.7 (161)bp

Asset qualityGross NPAs (`cr) 9,608 9,763 (1.6) 9,475 1.4

Gross NPAs (%) 3.2 3.3 (9)bp 3.6 (40)bp

Net NPAs (`cr) 2,231 2,182 2.2 1,861 19.9

Net NPAs (%) 0.8 0.8 1bp 0.7 4bp

Provision Coverage Ratio (%) 76.8 77.7 (90)bp 80.4 (360)bp

Slippage ratio (%) 1.2 1.3 (11)bp 1.2 5bps

Provision exps. to avg. assets (%) 0.3 0.3 6bp 0.4 (6)bp


Business growth moderates; NIM higher by 26bp qoq

During 4QFY2013, the banks advances grew by 14.3% yoy (1.2% qoq), aided by

a strong 30.0% yoy growth in the Domestic corporate book. Growth in the

corporate portfolio was due to increased working capital funding and project loans

disbursement from existing sanctions. Going forward, the Management expects

moderation in domestic corporate loan book from current levels and targets

around 20% yoy growth in total domestic loan book for FY2014. Overseas loan

book grew at a subdued pace of 5.6% yoy, primarily on account of INR

depreciation. In dollar terms, overseas advances remained flat on a yoy basis.

Going forward, the Management targets overseas loan book growth of 10% yoy

for FY2014, which would be driven largely by the appetite of the borrowers for

foreign currency loans over domestic rupee loans.

Growth in the retail loan portfolio came in moderate at 11.4% yoy, however the

organic retail portfolio (after excluding buyouts and Inter-bank participation

certificates) for the bank grew strongly by 25.6% on a yearly basis. Within retail,

robust traction was witnessed in mortgages, which grew by 18.2% yoy. Going

forward, the Management targets a retail loan book growth of 25% yoy for

FY2014, which would primarily come from growth in mortgages and in the

vehicles loan book.

Deposits accretion was modest with a growth of 14.5% yoy (2.2% qoq). The growth

in CASA deposits was lower than peers at 10.4% yoy (4.6% qoq). While savings

deposits increased by 12.6% yoy (5.1% qoq), the current deposits increased by

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April 29, 2013 4

5.5% yoy (3.5% qoq). As of 4QFY2013, the CASA ratio improved sequentially by

100bp to 41.9% (though lower by 160bp yoy). The average CASA improved to

38.1% in 4QFY2013. Going forward, the Management expects CASA ratio to

remain stable at the current levels.

The reported overall NIM improved by 26bp sequentially at 3.3%, mainly on

account of 23bp qoq improvement in domestic NIM to 3.7%, while International

NIMs remained flat at 1.3%. Lower margins were because of excess liquidity in the

overseas market. Going ahead, the Management expects overall margins to

improve by 10bp in FY2014 over FY2013.

Exhibit 4:Higher Domestic Corporate lending aided loan book growthParticulars (` cr) FY2013 FY2012 % chg (yoy) % to TotalDomestic Corporate 94,331 82,015 15.0 32.5Overseas branches 73,433 78,574 (6.5) 25.3SME 15,093 17,206 (12.3) 5.2Retail 107,392 108,971 (1.4) 37-Home 57,562 55,030 4.6 19.8

-Vehicle loans 25,989 30,076 (13.6) 9.0

-Others 13,209 11,987 10.2 4.6

-Business Banking 6,336 7,846 (19.2) 2.2

-Credit cards 2,685 2,833 (5.2) 0.9

-Personal loans 1,611 1,199 34.4 0.6

Total advances 290,249 286,766 1.2 100Source: Company, Angel Research

Exhibit 5:Business growth moderates


Exhibit 6:CASA ratio improves sequentially to 41.9%


17.3

21.6

17.6

16.5

14.4

13.3

16.1

14.8

9.9

14.5

99.3 100.2 97.7100.1 99.2

60.0

70.0

80.0

90.0

100.0

110.0

(3.0)-

3.0

6.0

9.0

12.0

15.0

18.0

21.0

24.0

4QFY12 1QFY13 2QFY13 3QFY13 4QFY13

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

43.5

40.6

40.7

40.9

41.9

9.1

12.410.9

3.2

10.4

-

10.0

20.0

25.0

30.0

35.0

40.0

45.0


CASA ratio (%) CASA yoy growth (%)

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April 29, 2013 5

Exhibit 7:Reported NIM improves by 26bp qoq


Exhibit 8:NII growth continues to remain strong


Fee income moderation continues

During 4QFY2013, the non-interest income (excluding treasury) for the bank grew

at subdued 2.2% yoy to `2,115cr, as trends of moderation in the fee income

continued. Fee income grew at a muted pace of 2.7% yoy, on back of lower

corporate banking fee income on account of slowdown in financial closures.

Going forward, the Management expects improvement in overall fee income and

targets lower double digit growth in fee income.

The bank registered lower treasury gain of `93cr (primarily bond gains, with the

equity portfolio witnessing MTM losses) as against `158cr in 4QFY2012. Income

from other segment remained flat at`

340cr. Overall, other income for the bankcame in flat at`2,208cr.

Exhibit 9:Muted growth in Fee income, affects other income performanceParticulars (`cr) 4QFY13 3QFY13 % chg (qoq) 4QFY12 % chg (yoy)Fee income 1,775 1,771 0.2 1,728 2.7

Treasury 93 251 (62.9) 158 (41.1)

Others 340 193 76.2 342 (0.6)

Other income 2,208 2,215 (0.3) 2,228 (0.9)Other income excl. treasury 2,115 1,964 7.7 2,070 2.2


3.0 3.0 3.03.1

3.3

1.0

1.5

2.0

2.5

3.0

3.5


NIM (Reported, %)

23.7

32.434.5

29.0

22.5

-

5.0

10.0

15.0

20.0

25.0

30.035.0

40.0

2,000

2,300

2,600

2,900

3,200

3,5003,800

4,100


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

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April 29, 2013 6

Exhibit 10:Fee income moderation continues


Exhibit 11:Still, healthy share of fee income in RoA


Asset quality remains stable sequentially

During 4QFY2013, the bank reported stability on the asset quality front, as gross

NPA levels improved sequentially by 1.6%, on an absolute basis, primarily aided

by sequentially lower slippages. Slippages for the quarter came in at `779cr

(annualized slippages rate at 1.2%) compared to `850cr in 3QFY2013 and

`635cr in 4QFY2012.

Gross NPA ratio declined sequentially by 9bp qoq to 3.3%, while net NPA ratio

remained stable at 0.8% sequentially. The PCR for the bank as of 4QFY2013

stands healthy at 76.8%. During the quarter, the bank restructured loans worth

`788cr (though higher, but was on expected lines), thereby taking its restructured

book to `5,315cr. As of 4QFY2013, as per the Managements guidance,

advances worth`600-700cr remain in the pipeline for restructuring.

Exhibit 12:Steep rise in O/s Restructured book


Exhibit 13:Asset quality stable sequentially


Under-leveraged branch network

The number of branches for the bank has almost doubled over the past three

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

of Rajasthan.This extensive pan-India network of 3,100 branches as of 4QFY2013

is under-leveraged, as reflected in the falling CASA deposits/branch of `39.5crcompared to `49.8cr as of 4QFY2008 and the total assets/branch of `173cr

compared to `306cr as of 4QFY2008. Going forward, we expect the bank to

leverage this network to further grow its CASA market share.

1,7

28

1,6

47

1,7

09

1,7

71

1,7

75

(3.5)

4.4

0.5

4.1

2.7

(5.0)

-

5.0

1,500

1,600

1,700

1,800


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

1.5

1.4 1.4 1.41.3

1.0

1.1

1.2

1.3

1.4

1.5

1.6


Fee income to average asse ts (%)

4,256 4,172 4,158 4,169

5,315

-

750

1,500

2,250

3,000

3,750

4,500

5,250

6,000


(`cr)

3.6

3.5

3.5

3.3

3.2

0.8

0.7

0.7

0.8

0.8

80.4 80.678.7

77.776.8

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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Exhibit 14:Largest Pvt. Sector branch network


Exhibit 15:Scope for improvement in business/branch


Overview of performance of subsidiaries

The consolidated net profit for FY2013 rose by a healthy 25.7% yoy to`9,604cr. The consolidated reported RoEs for FY2013 improved to 14.7%

from 13.0% in FY2012.

The overseas subsidiaries of the bank (viz ICICI Bank Canada and ICICI BankUK) remain over-capitalized, reflecting the banks strategy of consolidating

their operations (CAR in excess of 30% in both). Profitability wise, while ICICI

Bank Canada witnessed a strong performance with earnings growth of 26.7%

yoy at CAD43.6mn, ICICI Bank UK reported a profit de-growth of 43.3% yoy

at USD14.4mn.

ICICI Prudential Life reported a PAT of`1,496cr for FY2013 and maintainedits leadership position amongst private insurers, with a market share of 7.2%

(April-February 2012) based on new business retail weighted received

premium. During April 2012 to February 2013, the retail weighted received

premium for ICICI Life increased by 16.3% compared to a 2.2% yoy growth

for the private sector.

ICICI General reported a PAT of `306cr for FY2013 compared to a loss of`416cr in 4QFY2012. During the quarter, ICICI Bank infused `74cr in this

subsidiary, considering impact of the third party motor pool losses incurred byit in the last 2 years.

ICICI Home Finance reported a PAT of `220cr for FY2013, which was lowerby 15.3% on a yoy basis.

Other smaller subsidiaries reported a mixed performance for FY2013. WhileICICI Securities dealership & ICICI AMC reported a PAT growth of 41.8% yoy

and 25.0% yoy, PAT for ICICI Venture came in at`20cr compared to`68cr in

FY2012 and PAT for ICICI Securities (consolidated) came at `64cr as

compared to`78cr in FY2012.

2,0

16

2,5

01

2,5

12

2,5

29

2,5

33

2,5

35

2,5

52

2,7

52

2,7

55

2,7

72

2,8

95

3,1

00

-

500

1,000

1,500

2,0002,500

3,000

3,500

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

-

10

20

30

40

50

60

-

50

100

150

200

250

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

Total Assets/Branch ( cr)

CASA Deposits/Branch (` cr, RHS)

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April 29, 2013 8

Exhibit 16:Performance of subsidiariesSubsidiary Parameter FY2013 FY2012 % chgICICI Bank UK PAT (USD mn) 14.4 25.4 (43.3)

ICICI Bank Canada PAT (CAD mn) 43.6 34.4 26.7ICICI Bank Eurasia PAT (USD mn) 6.1 4.3 41.9

ICICI Home Finance PAT (`cr) 220 260 (15.4)

ICICI PrudentialLife Insurance

APE (`cr) 3,532 3,118 13.3

NBP (`cr) 529 500 5.8

NBP margin (%) 16.0 15.0 6.7

AuM (`cr) 74,164 70,771 4.8

ICICI LombardGen. Insurance

Gross Premium (`cr) 6,420 5,358 19.8

PAT (`cr) 306 (416) (173.6)

ICICI Securities PAT (`cr) 64 78 (17.9)

ICICI Securities PD PAT (`cr) 122 86 41.9ICICI Venture PAT (`cr) 20 68 (70.6)

ICICI Prudential AMC PAT (`cr) 110 88 25.0


Investment arguments

Well positioned to step up growth

ICICI Bank has strategically transformed itself over the past five years, which has

expectedly resulted in a significantly better balance sheet and earnings quality.

CASA ratio, which was 29% at the end of FY2009, has improved to around 42%

as of FY2013. Apart from the paradigm shift in the deposit mix reflected in its

healthy 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, which has not only resulted in better

asset quality, but has also led to sustainable improvement in NIMs.

While the Gross and Net NPA ratios have improved by 110bp and 130bp,

respectively to 3.2% and 0.8% as of FY2013 over FY2009, NIMs have improved

from 2.6% in to 3.1%, over the same period. Consequently, RoAs and RoEs, which

were at a low of 0.9% and 9.2%, respectively in FY2009, have improved to 1.5%

and 14.6% in FY2013. Going forward, in our view, there is still scope for

moderate upside to RoAs from improvement in risk adjusted NIMs and further to

RoEs from improvement in operating and financial leverage.

Moreover, in our view, the banks substantial branch expansion from

955 branches at the end of 4QFY2008 to 3,100 branches by 4QFY2013, and

strong capital adequacy, at 18.74% (Tier-I at 12.8%) has positioned it to grow at

least few percentage points faster than the average industry growth.

Asset quality trends remain healthy

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

trend in additions to gross as well as net NPAs. The reduction in risk profile of

advances has expectedly resulted in a commensurate decline in credit costs.

During FY2013, credit costs for the bank remained under check at 66bp, lower

than the Managements guidance of 75bp. Going forward, the Management has

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April 29, 2013 9

cautiously guided for credit costs of 75bp for FY2014. On the restructured front,

despite the expected spike in 4QFY2013, the restructuring book remains

comfortable at`5,315cr (1.8% of advances). PCR for the bank remained stable at

76.8%, as of 4QFY2013.

Outlook and Valuation

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 three to four years and strong

capital adequacy has positioned it to grow by at least a few percentage points

higher than the average industry growth. Moreover, a lower risk balance sheet has

driven down NPA provisioning costs. Further improvement in risk adjusted NIMsand higher growth is expected to drive a 15.5% CAGR in net profit over FY2013-

15E and enable a RoE of 15.6% by FY2015E (with further upside from financial

leverage).

At the current market price, the banks core banking business (after adjusting

`158/share towards value of the subsidiaries) is trading at 1.71x FY2015E ABV

(including subsidiaries, the stock is trading at 1.66x FY2015E ABV). We value the

banks subsidiaries at `158/share and the core bank at `1,195/share (2.1x

FY2015E ABV). We recommend Buy rating on the stock with a target price of`1,352.Exhibit 17:SOTP valuation summaryParticulars Target multiple Value/share (`)ICICI Bank 2.1x FY2015E ABV 1,195

Life Insurance 16.0x FY2015E NBP 77

General Insurance 10x FY2012 PAT 14

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

67

SOTP value 1,352Source: Angel Research

Exhibit 18:Key assumptionsParticulars (%) Earlier estimates Revised estimatesFY2014 FY2015 FY2014 FY2015Credit growth 22.0 23.0 18.0 21.0

Deposit growth 22.0 23.0 21.0 23.0

CASA ratio 41.7 41.9 41.1 41.3

NIMs 3.0 3.0 3.1 3.1

Other income growth 17.0 22.7 11.2 20.4

Growth in staff expenses 17.0 21.3 17.0 21.3

Growth in other expenses 17.0 21.3 17.0 21.3

Slippages 1.7 1.6 1.7 1.6

Coverage Ratio 76.0 75.0 76.0 75.0

Source: Angel Research

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Exhibit 19:Change in estimatesParticulars (` cr) FY2014E FY2015EEarlierestimates Revisedestimates Var. (%) Earlierestimates Revisedestimates Var. (%)NII 16,449 16,472 0.1 19,530 19,472 (0.3)

Non-interest income 9,922 9,232 (6.9) 12,087 10,858 (10.2)

Operating income 26,371 25,705 (2.5) 31,618 30,330 (4.1)Operating expenses 10,623 10,287 (3.2) 12,880 12,015 (6.7)

Pre-prov. profit 15,748 15,418 (2.1) 18,737 18,315 (2.3)Provisions & cont. 2,104 2,043 (2.9) 2,494 2,419 (3.0)

PBT 13,644 13,375 (2.0) 16,243 15,896 (2.1)Prov. for taxes 3,951 3,699 (6.4) 5,091 4,793 (5.9)

PAT 9,693 9,676 (0.2) 11,152 11,104 (0.4)Source: Angel Research

Exhibit 20:Angel EPS forecast vs consensusYear (`) Angel forecast Bloomberg consensus Var. (%)FY2014E 83.9 83.5 0.5

FY2015E 96.2 98.3 (2.0)

Source: Bloomberg, Angel Research

Exhibit 21:P/ABV band


-

300

600

900

1,200

1,500

1,800

2,100

2,400

Mar-06

Jul-06

Nov-0

6

Mar-07

Jul-07

Nov-0

7

Mar-08

Jul-08

Nov-0

8

Mar-09

Jul-09

Nov-0

9

Mar-10

Jul-10

Nov-1

0

Mar-11

Jul-11

Nov-1

1

Mar-12

Jul-12

Nov-1

2

Mar-13

Jul-13

Nov-1

3

Mar-14

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

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Exhibit 22:P/E band


Exhibit 23:ICICI Bank Premium/Discount to the Sensex

Source: Bloomberg, Angel Research

0

400

800

1,200

1,600

2,000

2,4002,800

3,200

Apr-05

Aug-0

5

Dec-0

5

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

Aug-1

2

Dec-1

2

Apr-13

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

(40)

(20)

0

20

40

60

80

100

Apr-06

Nov-0

6

Jun-0

7

Jan-0

8

Aug-0

8

Mar-09

Oct-09

May-1

0

Dec-1

0

Jul-11

Feb-1

2

Sep-1

2

Apr-13

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

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Exhibit 24:RecommendationsummaryCompany Reco. CMP(`) Tgt. price(`) Upside(%) FY2015EP/ABV (x) FY2015ETgt. P/ABV (x) FY2015EP/E (x) FY2013-15EEPS CAGR (%) FY2015ERoA (%) FY2015ERoE (%)AxisBk Buy 1,474 1,737 17.8 1.6 1.9 9.7 17.3 1.6 17.6

FedBk Neutral 448 - - 1.0 - 7.5 10.0 1.2 13.7HDFCBk Neutral 694 - - 3.3 3.3 16.3 22.8 1.8 21.8

ICICIBk* Buy 1,152 1,352 17.4 1.7 1.9 12.0 15.5 1.5 15.6SIB Neutral 24 - - 0.9 - 5.3 11.4 1.0 17.1

YesBk Neutral 504 - - 2.1 - 10.5 14.9 1.3 22.1

AllBk Accumulate 136 155 13.8 0.5 0.6 3.8 12.6 0.8 14.2

AndhBk Neutral 92 - - 0.6 - 3.9 4.2 0.8 13.4

BOB Buy 699 815 16.7 0.7 0.9 4.8 17.0 1.0 16.0

BOI Accumulate 328 360 9.8 0.7 0.8 4.8 21.8 0.8 15.1

BOM Neutral 56 - - 0.6 - 4.3 14.8 0.6 15.6

CanBk Accumulate 422 461 9.1 0.7 0.8 4.9 14.0 0.8 14.1CentBk Neutral 70 - - 0.6 - 3.9 42.8 0.6 13.3

CorpBk Buy 379 453 19.6 0.5 0.6 3.6 8.3 0.8 14.4

DenaBk Accumulate 93 101 9.1 0.5 0.6 3.5 4.3 0.8 15.3

IDBI# Neutral 90 - - 0.5 - 4.8 15.2 0.7 11.3

IndBk Buy 165 193 17.1 0.6 0.7 3.9 6.5 1.0 14.9

IOB Buy 64 74 16.2 0.4 0.5 3.1 53.3 0.7 13.1

J&KBk Neutral 1,321 - - 1.0 - 6.6 (5.2) 1.2 16.0

OBC Neutral 272 - - 0.6 - 4.3 17.5 0.8 13.1

PNB Accumulate 784 889 13.4 0.7 0.8 4.4 12.4 1.0 16.3

SBI* Accumulate 2,272 2,567 12.9 1.3 1.4 8.1 16.4 1.0 17.0

SynBk Accumulate 118 130 10.3 0.6 0.7 4.1 (3.5) 0.7 15.2

UcoBk Neutral 69 - - 0.7 - 4.8 36.9 0.6 12.6

UnionBk Accumulate 246 264 7.6 0.7 0.8 5.1 21.2 0.8 15.3

UtdBk Accumulate 60 68 12.7 0.4 0.5 2.9 40.4 0.7 14.7

VijBk Neutral 53 - - 0.6 - 4.9 21.2 0.5 11.7

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

Company Background

ICICI Bank is India's largest private sector bank, with a 5.5% market share in

credit. The bank has a pan-India extensive network of nearly 3,100 branches,largest for a private sector bank, and over 10,000 ATMs. The bank has a large

overseas presence (overseas loans comprise 25.2% of total loans). The bank also

has market-leading subsidiaries in life insurance, general insurance and asset

management.

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Income statement (Standalone)

Y/E March (` cr) FY10 FY11 FY12 FY13 FY14E FY15ENet Interest Income 8,114 9,017 10,734 13,866 16,472 19,472- YoY Growth (%) (10.8) 11.1 19.0 29.2 18.8 18.2Other Income 7,478 6,648 7,503 8,346 9,232 10,858- YoY Growth (%) (7.9) (11.1) 12.9 11.2 10.6 17.6

Operating Income 15,592 15,665 18,237 22,212 25,705 30,330- YoY Growth (%) (9.4) 0.5 16.4 21.8 15.7 18.0

Operating Expenses 5,860 6,617 7,850 9,013 10,287 12,015- YoY Growth (%) (16.8) 12.9 18.6 14.8 14.1 16.8

Pre - Provision Profit 9,732 9,048 10,386 13,199 15,418 18,315- YoY Growth (%) (4.3) (7.0) 14.8 27.1 16.8 18.8

Prov. & Cont. 4,390 2,290 1,589 1,803 2,043 2,419- YoY Growth (%) (13.0) (47.8) (30.6) 13.4 13.3 18.4

Profit Before Tax 5,342 6,758 8,797 11,397 13,375 15,896- YoY Growth (%) 4.4 26.5 30.2 29.5 17.4 18.9

Prov. for Taxation 1,317 1,606 2,332 3,071 3,699 4,793- as a % of PBT 24.7 23.8 26.5 26.9 27.7 30.1

PAT 4,025 5,151 6,465 8,325 9,676 11,104- YoY Growth (%) 7.1 28.0 25.5 28.8 16.2 14.8

Balance sheet (Standalone)Y/E March (` cr) FY10 FY11 FY12 FY13 FY14E FY15EShare Capital 1,465 1,502 1,503 1,504 1,504 1,504- Equity 1,115 1,152 1,153 1,154 1,154 1,154

- Preference 350 350 350 350 350 350

Reserve & Surplus 50,503 53,939 59,252 65,552 71,881 79,123

Deposits 202,017 225,602 255,500 292,614 345,284 417,794

- Growth (%) (7.5) 11.7 13.3 14.5 18.0 21.0

Borrowings 63,447 72,813 102,200 108,317 127,189 148,976

Tier 2 Capital 30,467 36,391 37,615 36,674 35,757 34,864

Other Liab. & Prov. 15,501 15,987 17,577 32,134 31,914 34,132

Total Liabilities 363,400 406,234 473,647 536,795 613,529 716,392Cash Balances 27,514 20,907 20,461 19,053 23,307 18,801

Bank Balances 11,359 13,183 15,768 22,365 21,017 24,617

Investments 120,893 134,686 159,560 171,394 188,194 213,623

Advances 181,206 216,366 253,728 290,249 342,494 414,418

- Growth (%) (17.0) 19.4 17.3 14.4 18.0 21.0

Fixed Assets 3,213 4,744 4,615 4,647 5,168 5,872

Other Assets 19,215 16,347 19,515 29,087 33,349 39,061

Total Assets 363,400 406,234 473,647 536,795 613,529 716,392- Growth (%) (4.4) 12.1 17.1 13.7 14.7 17.1

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Ratioanalysis (Standalone)

Y/E March FY10 FY11 FY12 FY13 FY14E FY15EProfitability ratios (%)NIMs 2.4 2.6 2.7 3.0 3.1 3.2Cost to Income Ratio 37.6 42.2 43.0 40.6 40.0 39.6

RoA 1.0 1.3 1.3 1.5 1.5 1.5

RoE 9.7 11.7 12.8 14.6 15.2 15.6

B/S ratios (%)CASA Ratio 41.7 45.1 43.5 41.9 41.7 41.4

Credit/Deposit Ratio 89.7 95.9 99.3 99.2 99.2 99.2

CAR 19.4 19.5 18.5 18.7 17.1 15.3

- Tier I 14.0 13.2 12.7 12.4 11.7 10.9

Asset Quality (%)Gross NPAs 5.1 4.5 3.6 3.2 3.4 3.5

Net NPAs 2.1 1.1 0.7 0.8 0.8 0.9

Slippages 1.5 1.5 1.3 1.4 1.6 1.6

Loan Loss Prov. /Avg.Assets

1.2 0.5 0.2 0.3 0.3 0.3

Provision Coverage 59.5 76.0 80.4 76.8 76.0 75.0

Per Share Data (`)EPS 36.1 44.7 56.1 72.2 83.9 96.2

ABVPS (75% cover.) 449.8 478.3 524.0 578.2 633.1 695.8

DPS 12.0 14.0 16.5 20.0 26.0 30.0

Valuation RatiosPER (x) 31.9 25.8 20.5 16.0 13.7 12.0

P/ABVPS (x) 2.6 2.4 2.2 2.0 1.8 1.7

Dividend Yield 1.0 1.2 1.4 1.7 2.3 2.6

DuPont AnalysisNII 2.3 2.4 2.5 2.8 2.9 3.0

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

Adj. NII 1.0 1.8 2.1 2.5 2.6 2.6

Treasury 0.2 (0.1) (0.0) 0.1 0.1 0.1

Int. Sens. Inc. 1.2 1.7 2.1 2.6 2.6 2.7

Other Inc. 1.8 1.7 1.6 1.4 1.4 1.4

Op. Inc. 3.0 3.5 3.7 4.0 4.0 4.1

Opex 1.6 1.8 1.8 1.8 1.8 1.8

PBT 1.4 1.7 1.9 2.1 2.2 2.3

Taxes 0.4 0.4 0.5 0.6 0.7 0.7

RoA 1.0 1.3 1.3 1.5 1.5 1.5Leverage 9.5 9.2 9.6 9.8 9.9 10.2

RoE 9.7 11.7 12.8 14.6 15.2 15.6

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icici bank 4q fy 2013

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