ICICI Bank is the second largest private bank of India and has a leading position in other financial services businesses through its subsidiaries. The bank offers a wide range of banking and financial services including commercial banking and treasury operations to large set of customers viz. large and mid-corporates, MSME, agriculture and retail businesses. The Bank’s business segments include Retail Banking, Wholesale Banking, Treasury, and Other Banking. The bank is working with a widespread network of over 5,718 branches and 13,186 ATMs across country.
|Result Analysis: ICICI Bank Limited (CMP: Rs.992)||Result Update: Q1FY24|
|Market Cap. (Cr.)||6,97,409|
|52 Wk. high/low||1002 / 780|
|Book Value (Rs)||300.85|
ICICI Bank reported strong numbers in Q1FY24 by laying 44% YoY and 8% QoQ increase in the consolidated net profit to Rs.10,636 cr.
Net Interest Income of the bank grew significantly with an increase of 37.6% YoY and 3.9% QoQ to Rs.20,738 cr. while Net Interest Margin decreased by 12 bps sequentially and increased by 77 bps on yearly basis.
Banks’s total advances grew by 17.5% YoY and 3.8% QoQ to Rs.11.25 lakh cr. led by healthy retail and domestic loans. Personal loans, Vehicle loans and Credit cards, all contributed to this growth. The corporate book also reported a strong improvement (up 4% QoQ), while the SME book increased by 29% YoY.
Total deposits aggregated to Rs.12.69 lakh cr. as of June’23, a growth of 17.8% YoY and 4.8% QoQ with CASA deposits aggregating 43% and term deposits 57%. The deposits growth was mainly driven by term deposits.
CASA deposits of the bank grew by 9% YoY to Rs.53.62 lakh cr. with savings account deposits accounting 30.3% and current account deposits accounting to 13% of total CASA. CASA ratio declined by 100 bps on QoQ and by 320 bps on YoY basis at 42%.6.
Asset quality of the bank remained stable in the quarter with Gross NPA of 2.76%, decrease of 65 bps YoY and Net NPA ratio at 0.48%, decrease of 22 bps YoY. Bank has added 1807cr. in the total slippages vs 382 cr. in Q1FY23.
Bank has added 174 branches and 80 ATMs in the quarter, aggregated to total 6074 branches and 16,731 ATMs at the end of June’ 2023.
|Particulars (In %)||Q1FY24||Q1FY23|
Conference Call Highlights:
The Cost of funds scaled by 30bp QoQ to 4.6%, and the bank anticipates that it will continue to rise throughout subsequent quarters.
Cost of Deposits grew from 3.98% in the 4QFY23 to 4.31% in the 1QFY24. A delay in deposit repricing will cause deposits to cost more in following quarters as well.
Total provisions (including contingent provisions) other than PCR-related provisions were Rs 223.5 billion (210 basis points of loans). Additionally, the bank has Rs 12.2 billion in provisions for borrowers that are under resolution, which is more than what is required by RBI norms.
NIM decreased from 4.9% in the 4QFY23 to 4.78% now. The bank expects that NIM would continue to decline in the following quarters.
The use of digital platforms by clients is steadily growing. By non-ICICI Bank account holders, iMobile Pay has been activated more than 10 million times as of June 23.
ICICI Bank reported another consistent quarter, supported by strong NII/Core operating profit growth, regulated provisioning, and stable asset quality. NII growth was driven by a consistent combination of a high-yielding portfolio (Retail/Business Banking) and a low-cost liabilities franchise. The bank is experiencing a robust recovery across all areas, and asset quality indicators are still looking good with a PCR of about 83%. The bank differentiates itself by its excellent liability mix, robust digital capabilities, and improved core PPoP metrics. Considering all these, we continue to have a bullish outlook for the ICICI Bank
|Particulars (In Rs. Cr.)||Q1FY24||Q4FY23||Q1FY23||QoQ%||YoY%|
|Net Interest Income||20,738||19,959||15,070||3.9%||37.6%|
|Net Profit after tax||10,636||9,853||7,385||8.0%||44.0%|
|Gross NPA||2.76||2.81||3.41||-5 bps||-65 bps|
|Net NPA||0.48||0.48||0.70||–||-22 bps|
|Net Interest Margin||4.78||4.90||4.01||-12 bps||77 bps|
|Capital Adequacy Ratio||16.7||18.3||18.0||-163 bps||-133 bps|
|Slippages (In Cr.)||1807||14||382||1793||1425|
|CASA Ratio||42.6||43.6||45.8||-100 bps||-320 bps|
Source: Company website, EWL Research
Disclosure in pursuance of Section 19 of SEBI (RA) Regulation 2014
Elite Wealth Limited does/does not do business with companies covered in its research reports. Investors should be aware that the Elite Wealth Limited may/may not have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only information in making their investment decision and must exercise their own judgment before making any investment decision.
For analyst certification and other important disclosures, see the Disclosure Appendix, or go to www.elitewealth.in. Analysts employed by Elite Wealth Limited are registered/qualified as research analysts with SEBI in India.( SEBI Registration No.: INH100002300)
Analyst Certification (For Reports)
Kiran Tahlani, Elite Wealth Limited, firstname.lastname@example.org
The analyst(s) certify that all of the views expressed in this report accurately reflect my/our personal views about the subject company or companies and its or their securities. I/We also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report. Unless otherwise stated, the individuals listed on the cover page of this report are analysts in Elite Wealth Limited.
As to each individual report referenced herein, the primary research analyst(s) named within the report individually certify, with respect to each security or issuer that the analyst covered in the report, that:
(1) all of the views expressed in the report accurately reflect his or her personal views about any and all of the subject securities or issuers; and
(2) no part of any of the research analyst’s compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed in the report.
For individual analyst certifications, please refer to the disclosure section at the end of the attached individual notes.
This note may include excerpts from previously published research. For access to the full reports, including analyst certification and important disclosures, investment thesis, valuation methodology, and risks to rating and price targets, please visit www.elitewealth.in.
Important disclosures, including price charts, are available and all Elite Wealth Limited covered companies by visiting https://www.elitewealth.in, or e-mailing email@example.com with your request. Elite Wealth Limited may screen companies based on Strategy, Technical, and Quantitative Research. For important disclosures for these companies, please e-mail firstname.lastname@example.org.
Options related research:
If the information contained herein regards options related research, such information is available only to persons who have received the proper option risk disclosure documents. For a copy of the risk disclosure documents, please contact your Broker’s Representative or visit the OCC’s website at https://www.elitewealth.in
All research reports made available to clients are simultaneously available on our client websites. Not all research content is redistributed, e-mailed or made available to third-party aggregators. For all research reports available on a particular stock, please contact your respective broker’s sales person.
Ownership and material conflicts of interest Disclosure
Elite Wealth Limited policy prohibits its analysts, professionals reporting to analysts from owning securities of any company in the analyst’s area of coverage. Analyst compensation: Analysts are salary based permanent employees of Elite Wealth Limited. Analyst as officer or director: Elite Wealth Limited policy prohibits its analysts, persons reporting to analysts from serving as an officer, director, board member or employee of any company in the analyst’s area of coverage.
Country Specific Disclosures
India – For private circulation only, not for sale.
Legal Entities Disclosures
Mr. Ravinder Parkash Seth is the Managing Director of Elite Wealth Ltd (EWL, henceforth), having its registered office at Casa Picasso, Golf Course Extension, Near Rajesh Pilot Chowk, Radha Swami, Sector-61, Gurgaon-122001 Haryana, is a SEBI registered Research Analyst and is regulated by Securities and Exchange Board of India. Telephone: 011-43035555, Facsimile: 011-22795783 and Website: www.elitewealth.in
EWL discloses all material information about itself including its business activity, disciplinary history, the terms and conditions on which it offers research report, details of associates and such other information as is necessary to take an investment decision, including the following:
- a) EWL or his associate or his relative has no financial interest in the subject company and the nature of such financial interest;
(b) EWL or its associates or relatives, have no actual/beneficial ownership of one per cent. or more in the securities of the subject company, at the end of the month immediately preceding the date of publication of the research report or date of the public appearance;
(c) EWL or its associate or his relative, has no other material conflict of interest at the time of publication of the research report or at the time of public appearance;
(a) EWL or its associates have not received any compensation from the subject company in the past twelve months;
(b) EWL or its associates have not managed or co-managed public offering of securities for the subject company in the past twelve months;
(c) EWL or its associates have not received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past twelve months;
(d) EWL or its associates have not received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past twelve months;
(e) EWL or its associates have not received any compensation or other benefits from the subject company or third party in connection with the research report.
3 In respect of Public Appearances
(a) EWL or its associates have not received any compensation from the subject company in the past twelve months;
(b) The subject company is not now or never a client during twelve months preceding the date of distribution of the research report and the types of services provided by EWL
Provided that research analyst or research entity shall not be required to make a disclosure as per sub-clauses (c), (d) and (e) of clause (ii) or sub-clauses (a) and (b) of clause (iii) to the extent such disclosure would reveal material non-public information regarding specific potential future investment banking or merchant banking or brokerage services transactions of the subject company.
(4) EWL or its proprietor has never served as an officer, director or employee of the subject company;
(5) EWL has never been engaged in market making activity for the subject company;
(6) EWL shall provide all other disclosures in research report and public appearance as specified by the Board under any other regulation