Fundamental Report ICICI Bank

Capital Adequacy:

Bank has a very strong capital adequacy of 17.91% of which 16.93% is Tier 1 capital. ICICI Bank has enough capital for next 2 year and they will not diluted there equity in near future.

ROA:

One of the biggest improvement under the new management  is improvement in ROA and ROE of the bank, ROA of the bank improved from 0.84% in FY18 to 1.9% in Q3FY22 and management has guided to improve ROA to 2%.ROE of the bank improved from 6.8% in FY18 to 14.5 in Q3FY22

Digital initiatives:

Technological expenses comprised 8.2% of the non-employee costs for 9MFY22.

The value of financial transactions on InstaBIZ for SME and Business Banking rose 68% YoY. The value of transactions through supply chain platforms increased 3.5x YoY in 3QFY22.

About 33%/43% of the home/personal loans were end-to-end digital in 9MFY22.

ICICI BANK SUBSIDIARIES:

ICICI Bank Prudential Life Insurance: ICICI Prudential Life Insurance Co. Ltd. is a joint venture between ICICI Bank and Prudential Corp. Holdings. The issuer offers protection for life and health along with pension products and services. In Q3FY22 gross premium up 2.1% YoY to Rs. 9,344cr and net premium up 1.1% YoY to Rs. 9,074cr, supported by well diversified product and distribution mix. VNB grew 34.8% YoY to Rs. 1,388cr in 9MFY22, aided by strong growth of 29.7% in new business premium during the same period.

ICICI Lombard General Insurance: is a private general insurance company, ICICI Lombard in Q3FY22 reported an in-line Q3 performance; weak growth in motor as well as retail health segments has been the major setback. Also, combined ratios (CoRs) have been elevated for the past few quarters (>105%), as health and motor saw increased claims on the back of steady normalization. It is expected  that loss ratios in the health segment to stabilise and remain range-bound, owing to the rapid pace of vaccination and mild nature of the Omicron variant. Gross direct premium income has grown to 13311 Crore in 9M-2022 (9M-2021: ` 10525 crore) . Combined ratio was at 111% in 9M-2022 vs 9MFY21 of 99.1%.

ICICI Securities: Revenue grew by 51.9% to ₹ 942 crore in Q3-2022 from growth across all businesses , New client acquisition of  676,000 in Q3-2022; highest ever quarterly addition ,Overall active clients grew by 89% y-o-y to 3.1 million in Q3-2022 , Profit after tax grew by 41.2% y-o-y to ₹ 1042 crore in 9M-2022.

ICICI Prudential Asset Management: Average AUM grew by 23.0% y-o-y and 4.5% q-o-q to ₹ 4, 67,461 crore in Q3-2022, Profit after tax grew by 22.0% y-o-y to ₹ 1097 crore in 9MFY22.ICICI Prudential AMC is the leading AMC in the country.

                                                                                                                                                                           (₹ in Crores)

Balance Sheet	2021	2020	2019	2018
SOURCES  OF  FUNDS :
Capital	1383.41	1294.76	1289.46	1285.81
Reserves Total	156200.99	121661.81	112959.27	109338.32
Minority Interest	9588.34	6794.77	6580.54	6008.19
Deposits	959940.02	800784.46	681316.94	585796.11
Borrowings	143899.94	213851.78	210324.12	229401.83
Other Liabilities & Provisions	102874.23	90315.78	77941.26	64574.76
Policy Holders Fund	203180.04	145486.25	152378.75	131488.43
TOTAL LIABILITIES	1577070.07	1380193.1	1242795.02	1127899.02
APPLICATION OF FUNDS :
cash & Balances with RBI	46302.21	35311.93	38066.28	33272.6
Balances with Banks	101268.33	92540.99	49324.62	55726.53
Investments	536578.62	443472.63	398200.76	372207.68
Advances	791801.39	706246.11	646961.68	566854.22
Fixed Assets	10809.26	10408.66	9660.42	9465.01
Other Assets	90310.27	92212.78	100581.26	90372.97
TOTAL ASSETS	1577070.08	1380193.1	1242795.02	1127899.01
Contingent Liability	3021344.23	3003053.53	2612071.93	1891035.82
Bills for collection	54846.38	48401.26	49579.19	28705.41

                                                                                                                                                                              (₹ in Crores)

Profit And Loss A/c	2021	2020	2019	2018
INCOME :
Interest Earned	79118.27	74798.32	63401.19	54965.89
Other Income	18968.53	16448.62	14512.16	17419.63
<strongTotal	98086.8	91246.94	77913.35	72385.52
Expenditure
Interest  expended	40128.84	41531.25	36386.4	31940.05
Payments to/Provisions for Employees	8091.78	8271.24	6808.24	5913.95
Operating & Administrative Expenses	5548.34	5486.58	4849.63	4252.34
Depreciation	1071.79	948.54	776.91	780.74
Other Expenses, Provisions & Contingencies	23063.32	20961.29	25315.42	22063.89
Provision for Tax	4665.66	3746.03	3360.6	2661.85
Deferred Tax	-675.62	2371.2	-2947.14	-2004.72
Total	81894.12	83316.12	74550.06	65608.1
Profit & Loss
Reported Net Profit	16192.68	7930.81	3363.3	6777.42
Profit brought forward	21327.47	17879.57	18495.26	18744.94
Transfer to Statutory Reserve	4048.2	1982.8	840.9	1694.4
Transfer to Other Reserves	2462.89	1854.8	2172.96	2910.32
Trans. to Government /Proposed Dividend	0	645.31	965.13	2422.39
Balance carried forward to Balance Sheet	31009.07	21327.47	17879.57	18495.26
Equity Dividend %	100	0	50	75
Dividend Per Share (Rs)	2	0	1	1.5
Earnings Per Share	23.41	12.25	5.22	10.54
Book Value	208.78	175.15	163.35	158.89

 

Key Ratios	2021	2020	2019	2018
Credit-Deposit (%)	80.95	86.52	90.54	92.92
Investment / Deposit (%)	31.16	32.11	33.84	34.68
Cash / Deposit (%)	4.77	5.14	5.85	6.17
Interest Expended / Interest Earned (%)	50.72	55.52	57.39	58.11
Other Income / Total Income (%)	19.34	18.03	18.63	24.07
Operating Expenses / Total Income (%)	21.98	23.69	23.06	21.46
Interest Income / Total Funds (%)	6.8	7.25	6.87	6.66
Interest Expended / Total Funds (%)	3.45	4.03	3.94	3.87
Net Interest Income / Total Funds (%)	3.35	3.22	2.93	2.79
Non-Interest Income / Total Funds (%)	1.63	1.59	1.57	2.11
Operating Expenses / Total Funds (%)	1.85	2.1	1.95	1.88
Profit before Provisions / Total Funds (%)	3.13	2.72	2.54	3
Net Profit / Total funds (%)	1.39	0.77	0.36	0.82
RONW (%)	12.56	7.25	3.24	6.81

Industry Overview:

The Banking industry in India has historically been one of the most stable systems globally, despite global upheavals. The government has consistently strived to promote financial inclusion through various initiatives targeted to bring the country’s underbanked population under the banking gamut. Assets of PSUs were nearly 60% of total banking assets. Bank Credit from FY16-20 has registered a CAGR of 3.6% and as of FY20 and total credit extended stand at $1.7 Trillion, deposits has registered a 14% CAGR from $1.15 Trillion (2016) to $2 Trillion (2021).

Indian Banks are expected to do very well for next 2-3 years, as economy is expected to expand in coming years, and ICICI being a leader in private bank is expected to gain market share and do well going forward. NPA are constantly coming down and bank balance sheet is strong enough for next leg of growth. Margins of Indian Banks are expected to improve in coming quarter as interest rate are expected to increase in coming quarter.

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