ICICI Bank Limited 's ( IBN ) fiscal
third-quarter 2013 (ended Dec 31) net profit came in at INR22.50
billion ($409 million). This reflects a jump of 30% from the
year-ago profit of INR17.28 billion ($314 million).CDN IMPL BK (CM): Free Stock Analysis ReportHDFC BANK LTD (HDB): Free Stock Analysis ReportICICI BANK LTD (IBN): Free Stock Analysis
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The robust results came on the back of augmented top line,
partially offset by a rise in loan loss provisions and higher
operating expenses. Moreover, asset quality continued to show signs
of improvement, while capital ratios remained impressive.
Performance in Detail
Net interest income surged 29% from INR34.99 billion ($636
million) in the prior-year quarter to INR27.12 billion ($493
million). Similarly, net interest margin surged 37 basis points
(bps) year over year to 3.07%.
Also, non-interest income elevated 17% from INR22.15 billion ($403
million) in the year-ago period to INR18.92 billion ($344
Operating expenses for the quarter totaled INR22.61 billion ($411
million), up 18% 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 Dec 31,
2012, the bank had 2,895 branches and 10,040 ATMs.
Provisions for the reported quarter increased 8% year over year to
INR3.69 billion ($67 million).
ICICI Bank's credit quality was a mixed bag during the quarter. As
of Dec 31, 2012, net nonperforming assets were INR21.85 billion
($397 million), rising 5% from INR20.82 billion ($379 million) in
the prior-year quarter. The bank's net nonperforming asset ratio
stood at 0.64%, declining 6 bps from the year-ago period.
As of Dec 31, 2012, ICICI Bank's total advances stood at
INR2,867.66 billion ($52.1 billion), rising 17% from INR2,461.57
billion ($44.8 billion) as of Dec 31, 2011. In the quarter under
review, ICICI Bank's savings account deposits amounted INR814.63
billion ($14.8 billion), while current account deposits totaled
INR356.74 billion ($6.5 billion). Moreover, as of Dec 31, 2012, the
current and savings account (CASA) ratio was 40.9%.
As per the Reserve Bank of India's guidelines on Basel II norm,
ICICI Bank's capital adequacy was 19.53% and Tier-1 capital
adequacy was 13.25% as of Dec 31, 2012. These were well above the
minimum requirements of 9.0% and 6.0%, respectively.
HDFC Bank Ltd. ( HDB ) reported its
fiscal third-quarter 2013 (ended Dec 31) net profit of INR18.59
billion ($0.34 billion), up 30.0% from the prior-year quarter.
Results benefited from improvement in top line, partially offset by
rise in expenses. Moreover, the company reported notable hikes 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. Nevertheless, we are
concerned about its highly competitive operating environment,
continuous rise in operating expenses and below-average credit
ICICI Bank currently retains a Zacks Rank #4 (Sell). However,
other foreign banks such as Canadian Imperial Bank of
Commerce ( CM ) and UBS
AG ( UBS )
retain a Zacks Rank #2 (Buy) and are highly recommended for