ICICI Bank :Q4FY12 First Cut

[RAJESH DESAI]

Having trouble viewing this email? Click here

Follow us on:        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.       Y/E Mar Rs mn  Mar-11  Jun-11  Sep-11  Dec-11  Mar-12 Int income 71,565 76,185 81,576 85,919 91,746   Int on advances 45,351 49,351 53,807 56,858 61,282   Int on Invest 22,093 22,510 23,450 24,725 26,155   Int on Bal with RBI 911 1,138 1,153 1,341 1,279   Int on others 3,210 3,185 3,166 2,994 3,031 Int expenses 46,467 52,076 56,512 58,799 60,699 NII 25,097 24,109 25,064 27,120 31,048 Y-o-Y (%) 23.3 21.1 13.7 17.3 23.7 Q-o-Q (%) 8.6 (3.9) 4.0 8.2 14.5 Non int income 16,407 16,429 17,396 18,919 22,285 Y-o-Y (%) (13.2) (2.2) 10.2 8.2 35.8 Q-o-Q (%) (6.2) 0.1 5.9 8.8 17.8 Operating Income 41,504 40,538 42,460 46,039 53,332 Y-o-Y (%) 5.7 10.4 12.3 13.4 28.5 Q-o-Q (%) 2.2 (2.3) 4.7 8.4 15.8 Staff 8,566 7,329 8,427 8,366 11,031 Others 9,889 10,869 10,495 10,802 11,185 Operating expenses 18,455 18,198 18,922 19,168 22,216 Y-o-Y (%) 20.9 22.7 20.5 11.6 20.4 Q-o-Q (%) 7.4 (1.4) 4.0 1.3 15.9 Operating Profit 23,049 22,340 23,538 26,871 31,116 Provisions & W/offs 3,836 4,539 3,188 3,411 4,693 Y-o-Y (%) (61.2) (43.1) (50.3) (26.5) 22.3 Q-o-Q (%) (17.4) 18.3 (29.8) 7.0 37.6 PBT 19,213 17,802 20,350 23,460 26,423    Tax 4,692 4,480 5,318 6,179 7,405    Tax rate 24.4 25.2 26.1 26.3 28.0 PAT 14,521 13,322 15,032 17,281 19,018 Y-o-Y (%) 44.4 29.8 21.6 20.3 31.0 Q-o-Q (%) 1.1 (8.3) 12.8 15.0 10.0             Advances 2,163,659 2,206,930 2,339,522 2,461,575 2,537,277 Y-o-Y (%) 19.4 19.7 20.5 19.1 17.3 Q-o-Q (%) 4.7 2.0 6.0 5.2 3.1 Deposits 2,256,021 2,306,778 2,450,917 2,605,894 2,555,000 Y-o-Y (%) 11.7 14.8 9.9 19.7 13.3 Q-o-Q (%) 3.6 2.2 6.2 6.3 (2.0) CD ratio 95.9 95.7 95.5 94.5 99.3             NIM 2.7 2.6 2.6 2.7 3.0 RoA 1.5 1.3 1.4 1.5 1.6 CI ratio 44.5 44.9 44.6 41.6 41.7 CAR 19.5 19.6 19.0 18.9 18.5             GNPA (%) 4.5 4.4 4.1 3.8 3.6 NNPA (%) 1.1 1.0 0.9 0.8 0.7 GNPA 100,343 99,828 100,213 97,230 94,753 NNPA 24,074 23,025 21,838 20,477 18,608 PCR 76.0 76.9 78.2 78.9 80.4

--
CA. Rajesh Desai