KEY TAKEAWAY

 

• Profit after Tax grew by 59.4% YoY to ₹ 70.19 bn in Q4-2022; and by 44.1% YoY to ₹ 233.39 bn in FY2022

• Core operating profit Margin 18.7% YoY ₹ 101.64 bn in Q4-2022; and 22.3% YoY ₹ 383.47 bn in FY2022

• Standalone return on equity 17.1% in Q4-2022; and 14.8% in FY2022 [ 12.3% in Q4-2021; and 12.2% in FY2021 ]

• Net Interest Margin 4.00% in Q4-2022; and 3.96% in FY2022 [ 3.84% in Q4-2021; and 3.69% in FY2021 ]

• CASA Deposits grew by 20.1% FY2022 to ₹ 5,184.37 bn [ FY2021 ₹ 4,316.23 bn ] ; Term Deposits grew by 9.3% FY2022 to ₹ 5,461.35 bn [ FY2021 ₹ 5,008.99 bn ]

• Total Advances grew by 17.1 % FY2022 to ₹ 8,590.2 bn [ FY2021 ₹ 7,337.29 bn ]

• Gross NPA ration decline to 3.6% at Mar 31, 2022 ₹ 339.20 bn [ 4.96% ₹ 413.73 bn at Mar 31, 2021 ] 

• Net NPA ration decline to 0.76% at Mar 31, 2022 ₹ 69.61 bn [ 0.85% ₹ 91.80 bn at Mar 31, 2021 ]   

 

India’s top Financial Institution, ICICI Bank on April 23, 2022 declared a Steller set of numbers; contrary to global market belief that the pandemic will impact the quality of assets in the Indian Banking sector. ICICI Bank is on its way to Lead the Indian private Banking space for the next decade giving a direct challenge or replacing the HDFC Bank which maintained its position for multiple decades now.

 

Earnings

 

ICICI Bank profit after tax grew by 59.4% YoY to ₹ 79.19 bn in Q4-2022; and by 44.1% YoY to ₹ 233.39 bn in FY2022. Its Core operating profit Margin stand at 18.7% YoY ₹ 101.64 bn in Q4-2022; and 22.3% YoY ₹ 383.47 bn in FY2022.

ICICI Bank maintained a Net Interest Income (NII) increased by 21% YoY to ₹ 126.05 bn [ US$ 1.7 bn ] in Q4-2022 from ₹ 104.31 bn [ US$ 1.4 bn ] in Q4-2021. And Net Interest Margin 4.00% in Q4-2022; and 3.96% in FY2022 [ 3.84% in Q4-2021; and 3.69% in FY2021 ]. Non-Interest Income, exclude treasury Income, increase by 11% YoY to ₹ 46.08 bn [ US$ 608 Mn ] in Q4-2022 from ₹ 41.37 bn [ US$ 546 Mn ] in Q4-2021.

Fee income grew by 14% year-on-year to ₹ 43.66 bm (US$ 576 Mn) in Q4-2022 from ₹ 38.15 bn (US$ 503 Mn) in Q4-2021. Fees from retail, rural, business banking and SME customers constituted about 77% of total fees in Q4-2022.

ICICI Bank maintained a very healthy standalone return on equity 17.1% in Q4-2022; and 14.8% in FY2022 [ 12.3% in Q4-2021; and 12.2% in FY2021 ].

 

Credit Growth

 

Total Advances grew by 17.1 % FY2022 to ₹ 8,590.2 bn from the last year figure FY2021 ₹ 7,337.29 bn. The Retail Loan portfolio comprised of 52.8% of the total loan portfolio at Mar 31, 2022 grew by 20% YoY and 6% sequentially. The Business banking portfolio grew by 43.2% YoY to ₹ 534.37 bn and 10.2% QoQ sequentially. The SME portfolio grew by 33.6% YoY to ₹ 404.50 bn  and 11.3% QoQ sequentially. The SME business comprising borrowers with a turnover of less than ₹ 2.50 bn (US$ 33 Mn). The Domestic corporate portfolio grew by 9.7% YoY to ₹ 1,937.34 bn  and 1.2% QoQ sequentially. ICICI Bank maintained a very healthy Credit growth rate well above Industry average in Indian Market post pandemic scenarios.

 

Deposit Growth

 

Total deposits increased by 14% YoY and 5% QoQ sequentially to ₹ 10,645.72 bn (US$ 140.5 bn) at March 31, 2022. CASA Deposits grew by 20.1% FY2022 to ₹ 5,184.37 bn [ FY2021 ₹ 4,316.23 bn ] ; Term Deposits grew by 9.3% FY2022 to ₹ 5,461.35 bn [ FY2021 ₹ 5,008.99 bn ]. ICICI Bank maintained a very healthy Deposit growth rate well above Industry average in Indian Market.

 

Capital Adequacy

 

ICICI Bank is well capitalise, its capital adequacy at March 31, 2022 was 19.16% and Tier-1 capital adequacy was 18.35% vis-à-vis to the minimum regulatory requirements of 11.70% and 9.70% respectively.

 

Asset Quality

 

The net non-performing assets declined by 24% YoY and 5% QoQ sequentially to ₹  69.61 bn (US$ 918 Mn) at March 31, 2022. ICICI Bank Gross NPA ratio decline to 3.6% at Mar 31, 2022 ₹ 339.20 bn [ 4.96% ₹ 413.73 bn at Mar 31, 2021 ]. Net NPA ration decline to 0.76% at Mar 31, 2022 ₹ 69.61 bn [ 0.85% ₹ 91.80 bn at Mar 31, 2021 ].   

 

The provision coverage ratio on non-performing assets was 79.2% at March 31, 2022. ICICI Bank asset quality in last three shown a remarkable improvement, it only reflect the excellent control over both growth and quality of asset mix in their portfolio.

 

Consolidated Results

 

The consolidated profit after tax increased by 58% YoY to ₹  77.19 bn (US$ 1.0 bn) in Q4 2022 from ₹ 48.86 bn (US$ 645 Mn) in Q4 2021. The consolidated profit after tax increased by 37% YoY to ₹ 251.10 bn (US$ 3.3 bn) in FY2022 from ₹ 183.84 bn (US$ 2.4 bn) in FY2021.

 

Group Companies Performance [ Top Subsidiaries & Associates ]

ICICI Securities

 

• Revenue grew by 33.0% to ₹ 34.38 bn in FY2022 from growth across all businesses

• New client acquisition of ~ 2.3 Mn in FY2022; highest ever in a year

• Overall active clients grew by ~77.5% YoY to 3.4 Mn in Q4-2022

• Profit after tax1 grew by 29.5% YoY to ₹ 13.83 bn in FY2022

 

ICICI AMC

 

• AAUM grew by 15.5% YoY to ₹ 4,681.97 bn in Q4 2022

• Market leader in equity and hybrid AUM with market share of 12.7% at Mar 31, 2022

• Profit after tax grew by 16.8% YoY to ₹ 14.54 bn in FY2022

 

ICICI Lombard General Insurance

 

• Gross direct premium income was ₹ 179.77 bn in FY2022 (FY2021: ₹ 140.03 bn)

• Market leader in motor segment with a share of 11.8% at March 31, 2022

 

ICICI Bank also announced a final dividend of Rs 5 per equity share [ equivalent to dividend of US$ 0.13 per ADS ] of Rs 2 each, which is subject to the approval of the shareholders of the company. ICICI Bank expanded its branch and ATM network in the recent years along with building best in class Digital banking capability to reach its customers. As on March 31st, 2022 its Branch & ATM network consist of 5,418 branches and total ATM network 13,626. 

 

For a long term Investor looking for a value pick, we recommend a buy at current level and accumulate at every correction for a target price of Rs 1056. Recommendation is based on the strength of a stellar performance; growth in both Deposits and Advances; Digit push started in the recent year yielding results; good Asset quality and a very healthy Capital Adequacy ratio. And last but not the least, the Return on equity is at 17.1%; EPS 33.66, Book value 262, and trading at a attractive valuation of 22 P/E at current price.