ICICI Bank Limited - ADR (IBN): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
We are downgrading our recommendation on ICICI Bank to Neutral owing to a continued deterioration in its asset quality. Nonetheless, the bank's strong second-quarter fiscal 2015 (ended Sep 30) results largely benefited from a rise in revenues, partially offset by elevated operating expenses and higher loan loss provisions. We expect the company's increased dependence on domestic loans, focus on improving fee income, a stable fund base and market leadership in the insurance business to continue generating synergies. However, a highly competitive operating environment, continuously rising expenses and stringent regulatory requirements will likely dampen ICICI Bank's financial performance.


Overview:

Headquartered in Mumbai, India, ICICI Bank Limited was formed in 1955 at the initiative of the World Bank, the government of India and Indian industry representatives. The principal objective was to create a financial institution for providing medium-term and long-term project financing to Indian businesses.

Until the late 1980s, ICICI Bank primarily focused its activities on project finance, providing long-term funds to a variety of industrial projects. With the liberalization of the Indian financial sector in the 1990s, ICICI Bank transformed its business from an institution offering only project finance to a diversified provider which, along with its subsidiaries and other group companies, provides a wide variety of financial products and services.

ICICI Bank is the largest private sector bank in India with total assets of about INR6,111.43 billion ($98.97 billion) as of Sep 30, 2014. The bank had a network of 3,815 branches and 11,739 ATMs as of the same date. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers. The company's subsidiaries operate in areas of investment banking, life and non-life insurance, venture capital and asset management.

ICICI Bank currently has subsidiaries in the U.K., Russia and Canada branches in the U.S., Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and representative offices in the UAE, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. The company's equity shares are listed in India on the Bombay Stock Exchange and the National Stock Exchange of India Ltd, and its American Depository Receipts (ADR) are listed on the New York Stock Exchange (NYSE).

The bank has seven main business segments: Treasury, Wholesale Banking, Life Insurance, Retail Banking, Other Banking, Other and General Insurance.

In Dec 2014, ICICI Bank split its stock in a ratio of 1:5 to attract more retail investors to its ownership base.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.




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