ICICI BANK LTD Q1FY22 – Earning Analysis – Globe Capital
17-Nov-2021
ICICI BANK LTD Q1FY22 – Earning Analysis

At the CMP of Rs. 681, the stock is trading at full year ttm P/BV multiple of 3.82 times with ttm book value of Rs 178 per share.

Q1 FY21 Overview and Verdict
CMP
Rs. 681
Verdict
Better market estimates

At the CMP of Rs. 681, the stock is trading at full year ttm P/BV multiple of 3.82 times with ttm book value of Rs 178 per share.

ICICI Bank reported a 78% year-on-year (YoY) rise in standalone net profit at Rs 4,616 crore for June quarter compared with Rs 2,599 crore in the same quarter last year.

Net interest income (NII) for the quarter rose 18% year-on-year to Rs 10,936 crore from Rs 9,280 crore YoY.

Non interest income for the quarter, excluding treasury income, rose 56 per cent to Rs 3,706 crore compared with Rs 2,380 crore in the same quarter last year.

Total deposits grew by 16% year-on-year to Rs.  926,224 crore (US$ 124.6 billion) at June 30, 2021.  24% year-on-year growth in average current and savings account (CASA) deposits in Q1-2022; average CASA ratio was 44% in Q1-2022.

The net interest margin was 3.89% in Q1-2022 compared to 3.84% in the quarter ended March 31, 2021 (Q4-2021) and 3.69% in Q1-2021

The net NPA ratio was 1.16% at June 30, 2021 compared to 1.14% at March 31, 2021

Provision coverage ratio was robust at 78.2% at June 30, 2021, higher than 77.7% at March 31, 2021

At June 30, 2021, the Bank held Covid-19 related provisions of Rs 6,425 crore (US$ 864 million)

Total capital adequacy ratio was 19.27% and Tier-1 capital adequacy ratio was 18.24% on a standalone basis at June 30, 2021 (including profits for Q1-2022)

Management Takeaways:

Provisions (excluding provision for tax) fell to Rs 2,852 crore in June quarter from Rs 7,594 crore in the year-ago quarter.

The Bank has changed its policy on non-performing loans during the June quarter to make it more conservative.

The change in policy resulted in higher provision on non-performing advances amounting to Rs 1,127 crore (US$ 152 million) for aligning provisions on outstanding loans to the revised policy.

Treasury income nosedived to Rs 290 crore compared with Rs 3,763 crore in the year-ago quarter. This is because treasury gain in the year-ago quarter included Rs 3,036 crore gains made from selling stake in subsidiaries.

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