ICICI Bank Limited
) fiscal fourth-quarter 2013 (ended Mar 31) net profit came in at
INR23.04 billion ($424 million). This reflects a rise of 21% from
the year-ago profit of INR19.02 billion ($350 million).
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For fiscal 2013, net income was INR83.25 billion ($1.5 billion),
up 29% from INR64.65 billion ($1.2 billion) in fiscal 2012.
The robust results came on the back of augmented net interest
income and lower loan loss provisions, partially offset by a rise
in operating expenses and a decrease in fee income. Though
capital ratios were impressive, asset quality deteriorated.
Performance in Detail
Net interest income grew 22% to INR38.03 billion ($700 million)
from INR31.05 billion ($572 million) in the prior-year quarter.
However, non-interest income dropped nearly 1% year over year to
INR22.08 billion ($407 million).
Operating expenses for the quarter totaled INR24.07 billion ($443
million), 8% higher year over year. The increase was primarily
due to the bank's branch-network expansion. ICICI Bank has the
largest branch-network among private sector banks in India. As of
Mar 31, 2013, the bank had 3,100 branches and 10,481 ATMs.
Provisions fell 2% year over year to INR4.60 billion ($85
ICICI Bank's credit quality deteriorated. As of Mar 31, 2013, net
nonperforming assets were INR22.34 billion ($411 million), rising
2% from INR21.85 billion ($402 million) in the prior-year
quarter. The bank's net nonperforming asset ratio was 0.64%,
increasing 2 basis points from the year-ago quarter.
As of Mar 31, 2013, ICICI Bank's total advances were INR2,902.49
billion ($53.5 billion), rising 14% from INR2,537.28 billion
($46.7 billion) as of Mar 31, 2012. The bank's savings account
deposits amounted to INR856.51 billion ($15.8 billion), while
current account deposits totaled INR369.26 billion ($6.8
billion). Moreover, as of Mar 31, 2013, the current and savings
account (CASA) ratio was 41.9%.
As per the Reserve Bank of India's guidelines on Basel II norm,
ICICI Bank's capital adequacy was 18.74% and Tier-1 capital
adequacy was 12.80% as of Mar 31, 2013. These were well above the
minimum requirements of 9.0% and 6.0%, respectively.
HDFC Bank Ltd.
) fiscal fourth-quarter 2013 (ended Mar 31) net profit of
INR18.90 billion ($0.35 billion) was up 30.1% from the prior-year
quarter. Results benefited from improvement in top line,
partially offset by a rise in expenses. Moreover, the company
reported notable increases in deposits and loans.
We anticipate continued synergies from ICICI Bank's high
dependence on domestic loans, almost stable funding base,
improving asset mix and enhanced pricing power. However, we are
concerned about its highly competitive operating environment,
persistent rise in operating expenses and below-average credit
ICICI Bank currently retains a Zacks Rank #3 (Hold). Better
performing foreign banks include
Banco Macro S.A.
) carrying a Zacks Rank #1 (Strong Buy) and
Deutsche Bank AG
) with a Zacks Rank #2 (Buy).