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Spark Capital: Q3FY13 Result Reviews of ICICI Bank




Spark Capital Advisors(India) Private Limited


06 Feb 2013





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ICICI Bank - Sturdy performance; Maintain BUY ICICI bank reported good set of numbers backed by 20% loan growth in domestic book, >3% margins and stable asset quality. Provision costs, incremental slippages (1.2% annualized) and restructuring (~ Rs. 3.5bn restructured during quarter and another ~Rs. 10bn in pipeline) were in line with estimates. Fee income growth however continued to remain lackluster (4% yoy growth) owing to lack of new project announcements. Steady to improving NIMs helped by higher margins in international book, clear articulation of strategic bias towards profitability over growth and improving cost to income ratios are key positives for the bank. Improvement in capex cycle as and when it happens can result in dual benefit of increasing the leverage as well as fee income streams for the bank helping in multiple rerating. While we do expect one-off chunky exposures to turn into NPA, we expect over all asset quality to hold up well given the relatively well seasoned infrastructure book vis-à-vis peers. We retain our BUY rating on the bank with a TP of Rs. 1384

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