Posted excellent results Long term immediate Target 470
*ICICI Bank* – Q1FY21 (Cons – UnAudited)
CMP: 381
Total Income at 37,939 Cr
33,869 Cr (12.03%) YoY | 40,121 Cr (5.41%) QoQ
Year ended 149,868 Cr Vs. 131,305 Cr (14.11%)
Net Profit of 3,118 Cr
2,514 Cr (24.04%) YoY | 1,251 Crs (149.24%) QoQ
Year ended 9,566 Cr Vs. 4,254 Cr (124.83%)
EPS (in Rs) 4.76
3.83 YoY | 1.90 QoQ
12 months ended EPS: 14.55 Vs. 6.60
Gross NPA 40,386 Cr
45,763 Cr YoY | 41,409 Cr QoQ
Net NPA at 8,675 Cr
11,857 Cr YoY 10,113 Cr QoQ
GNPA(%) 5.46 vs 6.49 YoY 5.53 QoQ
NNPA(%) 1.23 vs 1.77 YoY 1.41 QoQ
Return on asset (%) 0.95 Vs 0.81 YoY 0.49 QoQ
Capital Adequacy Ratio (%) 16% Vs. 16.1% Vs. 16.11% QoQ
View: Result is overall good and strong result. YoY total income increased and profit also up. Gross NPA and NPA declined in YoY and QoQ. ICICI Bank made additional Covid-related provisions of Rs 5,550 crore during the three-month period. Total Covid-19 provision stood at INR 8,275 Cr as of June 2020.
*Business Updates & Highlights*:
Net interest income (interest earned less interest expended) for the quarter ended June 30, 2020 grew by 19.9% to INR 9,280 crore from INR 7,737 crore for the quarter ended June 30, 2019.
Non-interest income at INR 2,380 crore was down by 26.7% of the net revenues for the quarter ended June 30, 2020 as against INR 3,247 crore in the corresponding quarter ended June 30, 2019. ‘Fees & commissions’, which goes into other income of stood at INR 2,104 crore compared to INR 3,039 crore in the corresponding quarter of the previous year therefore declined by 30.7% reflecting lower business volumes and customer activity in view of the lockdown.
During Q1-2021, the Bank has made an additional Covid-19 related provision amounting to INR 5,550 Crs. As at June 30, 2020, the Bank held Covid-19 related provision of INR 8,275 core. This additional provision made by the Bank.
Total deposits as of June 30, 2020 were INR 801,622 crore, an increase of 21% over June 30, 2019. CASA deposits comprising 41.1% of total deposits as of June 30, 2020. 15% growth in average current and savings account (CASA) deposits in Q1-2021.
Total balance sheet size as of June 2020 was INR 11,38,613 Cr Vs. 10,98,365 as of March 2020.
Total advances as of June 30, 2020 were INR 631,215 crore, an increase of 10% over June 30, 2019. Domestic advances grew by 21.0% over June 30, 2019.
Treasury income was INR 3,763 crore in Q1-2021 compared to INR 179 crore in Q1-2020.During Q12021, the Bank sold 4.0% shareholding in ICICI Lombard General Insurance (ICICI General) and 1.5% shareholding in ICICI Prudential Life Insurance (ICICI Life). Profit on sale of shareholding in subsidiaries of INR 3,036 crore
The provision coverage on non-performing loans, excluding cumulative technical write-offs, increased from 75.7% at March 31, 2020 to 78.6% at June 30, 2020.
*Subsidiaries Performance*
Value of New Business (VNB) of ICICI Life was INR 201 Crs in Q1-2021 compared to INR 309 crore in Q1-2020. The new business margin increased from 21.7% in FY2020 to 24.4% in Q1-2021. The Gross Direct Premium Income (GDPI) of ICICI General was INR 3,302 crore in Q12021 compared to INR 3,487 crore in Q12020.
ICICI Securities, on a consolidated basis, as per Ind AS, increased by 70% YoY to INR 193 crore in Q1FY21 from INR 114 crore in Q1FY20.
ICICI Prudential Asset Management Company (ICICI AMC), as per Ind AS, grew by 17% YoY to INR 257 crore in Q12021 from INR 219 crore in Q1FY20.
*Financial*
ROE and ROCE is around 8% and 6% respectively and book value per share is around INR 190 and share is currently trading at 1.9x of its book value. Bank is currently trading at annualized PE of around 24 which is average as per industry benchmark. FIIs, mutual fund and Insurance cos hold around 43%, 28.3% and 14.8% respectively.
*Share View*: Share price high 552 (52 week) and now 380. The Bank is engaged in providing a range of banking and financial services, including commercial banking, retail banking, project and corporate finance, working capital finance, insurance, venture capital and private equity, investment banking, broking and treasury products and services.
Strong support at INR 350/320. Short term outlook is good. Long term investor should continue with the bank with target price of INR 450/500
Opportunities: Loans under moratorium fell to 17.5% of outstanding loans as on June 30, from 30% in March. Balance sheet continuously showing strength in YoY and QoQ especially for deposit, advances all grew in YoY and QoQ. CASA deposit ratio is also improved around 41.1% of total deposits. Despite Covid – 19 outbreak ICICI has increased NII and also bottom line improved in YoY. Strong branch network: As of June 30, 2020, the Bank’s distribution network was at 5,324 branches and 15,661. The net interest margin was 3.69% in Q12021 compared to 3.87% in the quarter ended March 31, 2020 (Q42020) and 3.61% in Q12020, reflecting the higher liquidity with the Bank due to strong deposit inflows and limited credit demand due to the lockdown
Risk: Other income down in YoY and QoQ. The main components of other income Fee & Commission declined by more than 3.1% in this quarter. The continued slowdown in economic activity has led to a decrease in loan originations, the sale of third party products, the use of credit and debit cards by customers, the efficiency in collection efforts and waiver of certain fees. The continued slowdown may lead to a rise in the number of customer defaults and consequently an increase in provisions there against. As per the recent report by Central Bank All banking sector NPAs can be rise for this FY21.
CMP: 381
Total Income at 37,939 Cr
33,869 Cr (12.03%) YoY | 40,121 Cr (5.41%) QoQ
Year ended 149,868 Cr Vs. 131,305 Cr (14.11%)
Net Profit of 3,118 Cr
2,514 Cr (24.04%) YoY | 1,251 Crs (149.24%) QoQ
Year ended 9,566 Cr Vs. 4,254 Cr (124.83%)
EPS (in Rs) 4.76
3.83 YoY | 1.90 QoQ
12 months ended EPS: 14.55 Vs. 6.60
Gross NPA 40,386 Cr
45,763 Cr YoY | 41,409 Cr QoQ
Net NPA at 8,675 Cr
11,857 Cr YoY 10,113 Cr QoQ
GNPA(%) 5.46 vs 6.49 YoY 5.53 QoQ
NNPA(%) 1.23 vs 1.77 YoY 1.41 QoQ
Return on asset (%) 0.95 Vs 0.81 YoY 0.49 QoQ
Capital Adequacy Ratio (%) 16% Vs. 16.1% Vs. 16.11% QoQ
View: Result is overall good and strong result. YoY total income increased and profit also up. Gross NPA and NPA declined in YoY and QoQ. ICICI Bank made additional Covid-related provisions of Rs 5,550 crore during the three-month period. Total Covid-19 provision stood at INR 8,275 Cr as of June 2020.
*Business Updates & Highlights*:
Net interest income (interest earned less interest expended) for the quarter ended June 30, 2020 grew by 19.9% to INR 9,280 crore from INR 7,737 crore for the quarter ended June 30, 2019.
Non-interest income at INR 2,380 crore was down by 26.7% of the net revenues for the quarter ended June 30, 2020 as against INR 3,247 crore in the corresponding quarter ended June 30, 2019. ‘Fees & commissions’, which goes into other income of stood at INR 2,104 crore compared to INR 3,039 crore in the corresponding quarter of the previous year therefore declined by 30.7% reflecting lower business volumes and customer activity in view of the lockdown.
During Q1-2021, the Bank has made an additional Covid-19 related provision amounting to INR 5,550 Crs. As at June 30, 2020, the Bank held Covid-19 related provision of INR 8,275 core. This additional provision made by the Bank.
Total deposits as of June 30, 2020 were INR 801,622 crore, an increase of 21% over June 30, 2019. CASA deposits comprising 41.1% of total deposits as of June 30, 2020. 15% growth in average current and savings account (CASA) deposits in Q1-2021.
Total balance sheet size as of June 2020 was INR 11,38,613 Cr Vs. 10,98,365 as of March 2020.
Total advances as of June 30, 2020 were INR 631,215 crore, an increase of 10% over June 30, 2019. Domestic advances grew by 21.0% over June 30, 2019.
Treasury income was INR 3,763 crore in Q1-2021 compared to INR 179 crore in Q1-2020.During Q12021, the Bank sold 4.0% shareholding in ICICI Lombard General Insurance (ICICI General) and 1.5% shareholding in ICICI Prudential Life Insurance (ICICI Life). Profit on sale of shareholding in subsidiaries of INR 3,036 crore
The provision coverage on non-performing loans, excluding cumulative technical write-offs, increased from 75.7% at March 31, 2020 to 78.6% at June 30, 2020.
*Subsidiaries Performance*
Value of New Business (VNB) of ICICI Life was INR 201 Crs in Q1-2021 compared to INR 309 crore in Q1-2020. The new business margin increased from 21.7% in FY2020 to 24.4% in Q1-2021. The Gross Direct Premium Income (GDPI) of ICICI General was INR 3,302 crore in Q12021 compared to INR 3,487 crore in Q12020.
ICICI Securities, on a consolidated basis, as per Ind AS, increased by 70% YoY to INR 193 crore in Q1FY21 from INR 114 crore in Q1FY20.
ICICI Prudential Asset Management Company (ICICI AMC), as per Ind AS, grew by 17% YoY to INR 257 crore in Q12021 from INR 219 crore in Q1FY20.
*Financial*
ROE and ROCE is around 8% and 6% respectively and book value per share is around INR 190 and share is currently trading at 1.9x of its book value. Bank is currently trading at annualized PE of around 24 which is average as per industry benchmark. FIIs, mutual fund and Insurance cos hold around 43%, 28.3% and 14.8% respectively.
*Share View*: Share price high 552 (52 week) and now 380. The Bank is engaged in providing a range of banking and financial services, including commercial banking, retail banking, project and corporate finance, working capital finance, insurance, venture capital and private equity, investment banking, broking and treasury products and services.
Strong support at INR 350/320. Short term outlook is good. Long term investor should continue with the bank with target price of INR 450/500
Opportunities: Loans under moratorium fell to 17.5% of outstanding loans as on June 30, from 30% in March. Balance sheet continuously showing strength in YoY and QoQ especially for deposit, advances all grew in YoY and QoQ. CASA deposit ratio is also improved around 41.1% of total deposits. Despite Covid – 19 outbreak ICICI has increased NII and also bottom line improved in YoY. Strong branch network: As of June 30, 2020, the Bank’s distribution network was at 5,324 branches and 15,661. The net interest margin was 3.69% in Q12021 compared to 3.87% in the quarter ended March 31, 2020 (Q42020) and 3.61% in Q12020, reflecting the higher liquidity with the Bank due to strong deposit inflows and limited credit demand due to the lockdown
Risk: Other income down in YoY and QoQ. The main components of other income Fee & Commission declined by more than 3.1% in this quarter. The continued slowdown in economic activity has led to a decrease in loan originations, the sale of third party products, the use of credit and debit cards by customers, the efficiency in collection efforts and waiver of certain fees. The continued slowdown may lead to a rise in the number of customer defaults and consequently an increase in provisions there against. As per the recent report by Central Bank All banking sector NPAs can be rise for this FY21.
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