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Thursday, October 31, 2013

Views on ICICI Bank 2QFY2014 results - Angel Broking

Views of Mr. Vaibhav Agrawal (VP- Research – Banking, Angel Broking) on ICICI Bank 2QFY2014 results:

“ICICI Bank reported a healthy operating performance during the quarter, which was in line with our estimates and ahead of streets’. NII grew at healthy pace of 20%, aided by healthy loan book growth of 16 % and sequential improvement in overall margins to 3.31%. International NIMs improved by 20bp qoq to 1.8%, while domestic NIMs improved marginally by 2bp qoq to 3.65 % (which was a positive surprise, given the tightened liquidity throughout the quarter). Non-interest income grew by 6% yoy to Rs. 2,166cr, within which fee income registered a healthy growth of 16% yoy to Rs. 1,994cr.

Operating expenses grew by mere 5%, which aided the profitability. On the asset quality front, absolute Gross NPAs remained flat sequentially (probably the bank witnessed higher write-offs during the quarter), while net NPAs, on an absolute basis increased 9.5% qoq (as PCR came off by 230bp qoq to 73.1%). The bank’s restructured loan book increased 15 % qoq to Rs. 6826cr (2.3 % of net advances), which was in-line with the management’s guidance. Overall, the bank’s asset quality performance during the quarter, was reasonable in light of prevailing economic environment. Provisioning expenses for the bank increased by 23% yoy to Rs. 625cr, of which a large part of it (Rs. 279cr) was for Net MTM losses (the bank provided the entire MTM loss during the quarter). Overall, the bank reported healthy bottom-line growth of 20% yoy. At CMP, the stock is trading at 1.5x FY2015 ABV.We maintain our Buy recommendation on the stock.”

 Angel Broking
Corporate Communications
Ackruti Star, 6th Floor,
MIDC, Andheri (E), Mumbai – 400093
Main              : 022  - 393576000 (Ext-6956)
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