06 December 2021 Company Update

ICICI Bank
Blossoming into a BankTech; positive for growth BUY
ICICI Bank (ICICIBC) hosted its annual flagship Analyst Day, which was CMP (as on 3 Dec 2021) INR717
dominated by a showcase of early inroads into the banktech journey across
Target Price INR890
B2C and B2B segments. Beyond the technology jargon, ICICIBC continues to
drive its industry-first tech initiatives with increasing traction in NTB NIFTY 17,197
customer acquisition, 130+ FinTech partnerships, and ecosystem banking to
KEY
accelerate business growth. The co-branded credit card with Amazon has OLD NEW
CHANGES
emerged as a model for the potential of such collaborations, helping in the
Rating BUY BUY
rapid growth of market share in both card issuances and card spends. The
iMobile app has proven to be a monster acquisition engine, with cross-sell Price Target INR 885 INR 890

traction of ~10% of the 4.5mn onboarded NTB customers; the bank intends to FY22E FY23E
emulate this strategy in the B2B segment also. With consistent superior overall EPS %
-0.1% 0.7%
performance, ICICIBC is poised for market share gains across segments,
delivering a ~15% RoE by FY23E. We raise our FY23-FY24E loan growth
KEY STOCK DATA
estimates and maintain BUY with a revised TP of INR890 (standalone bank at
2.7x Sep’23 ABVPS). In the banking sector, ICICIBC remains our top pick. Bloomberg code ICICIBC IN

 Massive growth canvas from perfected banktech strategy: ICICIBC’s No. of Shares (mn) 6,940

banktech initiatives such as iMobile (open mobile banking platform), iLens MCap (INR bn) / ($ mn) 4,973/66,833
(digital lending platform) and FinTech partnerships (AmazonPay, etc.) are 6m avg traded value (INR mn) 9,730
now blossoming into perfected B2C NTB customer acquisition engines,
52 Week high / low INR 867/468
leading to a visible improvement in metrics. This gives the bank a wider
customer base to cross-sell to, expanding its medium-term growth potential.
STOCK PERFORMANCE (%)
 CC CIF and spends - check; receivables - WIP: Aided by the AmazonPay
tie-up and regulatory embargo on competitors, ICICIBC has significantly 3M 6M 12M

shored up its CC CIF market share by ~200bps and, more impressively, the Absolute (%) (1.1) 10.2 48.7
spends market share by ~800bps during Oct’20-Oct’21 (aided by commercial Relative (%) (0.3) (0.3) 19.4
cards as well). However, this traction is yet to translate into growth in
receivables per card (lowest amongst peers), which remains critical for
SHAREHOLDING PATTERN (%)
driving superior unit economics of the cards franchise.
Jun-21 Sep-21
 Rising confidence in B2B growth: As incremental risk-adjusted margins
have turned positive, ICICIBC is now confident of leveraging its banktech Promoters 0 0

capabilities to drive growth in the B2B business by targeting NTB clients FIs & Local MFs 41.8 42.5
through digital offerings (InstaBiz, InstaOD/CC). The ecosystem banking FPIs 48.0 47.3
approach is aimed at large corporates to drive business growth.
Public & Others 10.2 10.0
 Poised for accelerated market share gains, re-rating: ICICIBC is on track to
Pledged Shares 0 0
achieve a 15% RoE by FY23 due to improving overall performance. With
rising impetus on its banktech initiatives to achieve incremental growth, we Source : BSE
turn more constructive on the loan growth forecasts for FY23 and FY24, Pledged shares as % of total shares
since we expect ICICIBC to expand market share.
Financial summary Krishnan ASV
(INR bn) FY18 FY19 FY20 FY21 FY22E FY23E FY24E venkata.krishnan@hdfcsec.com
NII 230.3 270.1 332.7 389.9 461.2 540.6 623.3 +91-22-6171-7314
PPOP 247.4 234.4 281.0 364.0 396.3 473.2 547.8
PAT 67.8 33.6 79.3 161.9 214.1 270.4 316.9 Deepak Shinde
EPS (INR) 10.5 5.2 12.3 23.4 31.0 39.1 45.8 deepak.shinde@hdfcsec.com
ROAE (%) 6.6 3.2 7.1 12.3 13.6 15.2 15.6 +91-22-6171-7323
ROAA (%) 0.8 0.4 0.8 1.4 1.6 1.8 1.8
ABVPS (INR) 110.7 137.7 155.2 191.3 215.4 248.4 283.9 Neelam Bhatia
P/ABV (x) 6.5 5.2 4.6 3.7 3.3 2.9 2.5 neelam.bhatia@hdfcsec.com
P/E (x) 68.0 137.4 58.5 30.6 23.2 18.3 15.6 +91-22-6171-7354
Source: Company, HSIE Research

HSIE Research is also available on Bloomberg ERH HDF <GO> & Thomson Reuters
ICICI Bank: Company Update

Retail – NTB cohort to build on existing momentum

 NTB customer acquisition augmenting growth: ICICI Bank’s digital initiatives,
such as industry-first customer-agnostic Super Banking App (i-Mobile) and
digital lending platform (iLens) for ETB/NTB customers, are increasing NTB
customer acquisition in a non-linear manner at incremental little opex. It expands
cross-selling opportunities for its asset/liability products, driving business
throughput. For example, ICICIBC has gained ~4.5mn NTB users on its i-Mobile
platform, of which ~10% have purchased an ICICI Bank product. Between April
and October 2021, ‘i-Lens’, a digital lending platform for retail loans (mortgage,
auto, and personal loans) witnessed 2.5x, 1.7x, and 4.2x YoY growth respectively.

 Increasing digitisation lowering opex: The digital initiatives are helping

improve cost efficiency, in addition to creating business momentum. On the back
of digital infrastructures such as Aadhaar, video-KYC, and e-sign, the bank is
able to dispense loans even to NTB customers in a completely digital manner
(only 14% KYC for personal loans in Oct’21 was done physically, either paper-
based or BC assisted).

Exhibit 1: Higher retail loan growth compared to peers Exhibit 2: Business momentum through digital sourcing

ICICIBC AXSB HDFCB Digital sourcing (Insta loans) Growth (FY22-YTD)

34%

Home loans (value of approvals) 250%

26%

18% Auto loans (by value) 420%

10% Personal loans disbursed (by value) 170%

2%
OD on fixed deposits 500%
1QFY20
1QFY18
2QFY18
3QFY18
4QFY18
1QFY19
2QFY19
3QFY19
4QFY19

2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22

Source: Company, HSIE Research

Source: Company, HSIE Research | Note: HDFC Securities is a

subsidiary of HDFC Bank

Exhibit 3: iMobile–driving traffic, improving cross-sell Exhibit 4: Digitisation in personal loans - Only ~14%
KYC for personal loans done physically (Oct’21)

Video-KYC
23%

Pre-
approved
63%
BC assisted
8%

Physical
6%

Source: Company, HSIE Research Source: Company, HSIE Research

Page | 2
ICICI Bank: Company Update

 FinTech partnerships providing market leadership and further boost to retail

book: ICICI Bank, with its 130+ FinTech partnerships across payments, credit,
customer onboarding, collections, operations, etc. is further augmenting its
strategy of retailization of loan book as well as well as NTB customer acquisition
for driving growth. The partnerships have been across segments such as wallet
(Swiggy), PayLater (MMT, goibibio), FASTag issuances (GooglePay, PhonePe),
Gold loans (Rupeek) etc. ICICI AmazonPay partnership is one of its most
successful one with >2mn cards issued within three years, >60% of them being
NTB customers. The Bank is the market leader in FASTags, with ~35% market
share by value (Oct’21) and has one of the highest market share in UPI acquiring
at ~17%.

Exhibit 5: Select FinTech partnerships – entity and Exhibit 6: FinTech partnerships – customer solutions
merchant solutions

Source: Company, HSIE Research Source: Company, HSIE Research

 Card issuances - CHECK; spends traction - CHECK; traction in receivables –
WIP: ICICI Bank's strategy of FinTech partnerships, along with tailwinds in
terms of regulatory embargo on competitors, has aided in ramping up the card
issuances pace significantly, which has now eventually begun to translate into
higher card spends (market leader in terms of monthly spends per card among
peers). Improving per-card spends is typically a lead indicator for driving the
overall profitability of cards business (on per card basis). While we are yet to
completely ascertain the contribution of commercial card spends to the overall
mix, we believe overall card spends traction for ICICI Bank is very impressive.
However, our incremental focus will be now on the translation of these spends
into receivables on the balance sheet for ICICI Bank. An optimum share of NII in
the revenue pool of credit cards, driven by revolving balances and EMI loans,
drives superior risk-adjusted profitability of a credit cards portfolio in terms of
ROA as well as net profit per card. ICICI Bank's receivables per card remains one
of the lowest amongst peers (as on Sep'21) driven probably by underlying
customer profile and the bank's cautious stance of revolving loans and EMI loans
on credit card.
Exhibit 7: Stupendous increase in market share in CIF (Credit cards) ….
(%) Mar-18 Mar-19 Mar-20 Sep-20 Nov-20 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21
HDFCB 28.5 26.5 25.1 25.5 25.6 24.0 23.8 23.6 23.3 23.1 23.0 23.0
AXSB 12.0 12.7 12.1 11.7 11.5 11.6 11.4 11.4 11.4 11.4 11.6 11.7
SBICARD 16.7 17.6 18.3 18.8 18.8 19.2 19.2 19.2 19.3 19.4 19.3 19.2
ICICIBC 13.3 14.1 15.8 15.8 16.2 17.2 17.4 17.6 17.7 17.9 18.0 18.0
KMB 3.9 4.3 4.0 3.9 3.9 3.7 3.7 3.8 3.8 3.8 3.8 3.8
IIB 2.1 2.3 2.3 2.4 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5
RBK 2.1 3.6 4.6 4.6 4.8 4.8 4.9 4.9 4.8 4.7 4.8 4.9

Source: RBI, HSIE Research | Note: HDFC Securities is a subsidiary of HDFC Bank

Page | 3
ICICI Bank: Company Update

Exhibit 8: …now translating into surge in market share in credit card spends
(%) FY18 FY19 FY20 H1FY21 Nov-20 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21
HDFCB 28.6 28.1 28.8 31.2 30.7 28.5 27.0 27.9 27.8 26.5 25.1 26.3
AXSB 9.6 10.2 10.4 8.3 8.6 8.8 7.9 8.3 8.2 8.8 8.4 9.1
SBICARD 16.7 17.0 17.9 20.1 20.1 18.6 18.3 19.5 19.2 18.7 18.3 18.9
ICICIBC 11.2 11.1 12.3 13.7 14.1 17.7 17.4 18.9 19.2 19.6 21.5 21.4
KMB 2.3 2.7 2.7 2.8 2.5 2.4 2.4 2.4 2.5 2.6 3.2 2.5
IIB 3.4 4.2 4.1 3.4 4.4 4.1 3.4 4.1 4.4 4.7 5.2 4.8
RBK 1.5 2.7 4.0 4.8 4.5 4.9 4.9 4.8 4.6 4.5 4.3 4.1

Source: RBI, HSIE Research | Note: HDFC Securities is a subsidiary of HDFC Bank

Exhibit 9: Higher spends per card yet to translate into higher receivables per card

HDFCB AXSB SBICARD ICICIBC

(INR' 000)
48

39

30

21

12
2QFY19

2QFY22
1QFY19

3QFY19

4QFY19

2QFY20

3QFY21

4QFY21

1QFY22
Source: RBI, Company, HSIE Research | Note: HDFC Securities is a subsidiary of HDFC Bank

Page | 4
ICICI Bank: Company Update

Wholesale – Shifting gears for growth

 De-risked portfolio exhibiting steady behaviour: ICICI Bank’s de-risked
wholesale book has been performing steadily with little negative surprises
during the NBFC-RE crisis and during the pandemic period. The risk-calibrated
approach, along with ~90% of incremental disbursements on A- & above rated
entities, has aided in the credit cost-adjusted margins turning positive for the
wholesale book during FY21. With a pruned back-book and having demonstrated
execution of digital capabilities in the retail segment, ICICI Bank is now
leveraging its digital initiatives to drive growth in wholesale banking.

Exhibit 10: Credit cost-adjusted margin – commercial Exhibit 11: Corporate+SME Net NPA and slippages –
loan book range-bound

Credit cost-adjusted margin Net NPA % Gross slippages %

8%
1.0%
6%
-0.5%
4%
-2.0%
2%

-3.5%
0%
3QFY19

4QFY19

1QFY20

2QFY20

3QFY20

4QFY20

1QFY21

2QFY21

3QFY21

4QFY21

1QFY22

2QFY22
-5.0%
FY15 FY16 FY17 FY18 FY19 FY20 FY21

Source: Company, HSIE Research Source: Company, HSIE Research

 Prolonging the growth runway with NTB customers’ acquisitions & FinTech
Partnerships: ICICI Bank is now focusing on open banking (solutions for non-
ICICIBC customers) and FinTech partnerships to drive business growth for SME
and business banking segment. InstaBiz, a business banking app which provides
banking solutions for non-ICICIBC customers as well, is aiding in acquisition of
NTB customers with >1mn+ customers onboarded on the platform. The bank’s
new digital initiatives such as InstaOD and InstaCA to NTB/ETB customers
through instant boarding and disbursements digitally, driven by digital
infrastructure and business rule engines is augmenting growth on both sides of
the balance sheet.

Exhibit 12: Loan growth in SME/Business Banking has Exhibit 13: High engagement levels of customers on the
remained strong for the last few quarters InstaBiz platform

SME Business Banking Total active customers 1mn+

60%

45% Payments on digital channels 90%

30% Monthly logins per user 37

15%
Growth in financial transactions 1.6x
0% Source: Company, HSIE Research
2QFY20

3QFY20

4QFY20

1QFY21

2QFY21

3QFY21

4QFY21

1QFY22

2QFY22

Source: Company, HSIE Research

Page | 5
ICICI Bank: Company Update

 Ecosystem-based approach for the wholesale portfolio: ICICI Bank’s gradual

adoption of ecosystem banking approach in the wholesale segment is likely to aid
in improving customer stickiness, business throughput with higher operating
efficiency, eventually driving profitability. The bank has identified several
ecosystems such as corporate, merchants, e-commerce etc. to tap into, using its
enhanced digital offerings, as well as creating customized solutions to the larger
clients. There has been steady improvement in business throughput metrics,
along with improving cost efficiency.
With the corporate capex cycle remaining elusive, the approach provides several
credit as well as non-credit solutions to drive the revenues from the segment. The
following exhibit illustrates the business opportunities through ecosystem
banking for an auto company and the resultant impact on earnings.

Exhibit 14: 3600 banking by ICICI Bank – example of an auto manufacturer

Source: Company, HSIE Research

 Market share gains across the ecosystems; improving throughput metrics: With
its industry-leading tech initiatives, ICICI Bank is striving to gain market share in
various ecosystems, driving its business throughput. SME/Business Banking’s
share of loan mix for ICICI Bank has typically been lower than that of peers. With
its superior digital product offerings, along with a ~7% market share in banking
credit, ICICI Bank should aspire for double-digit market share across segments.
The ecosystem banking approach, augmented with digital-first approach has
aided in driving improving balance sheet and P&L metrics for ICICI Bank.

Exhibit 15: ICICI Bank’s market share across ecosystems

Salary upload
FDI/ODI flow Import trade flow Export trade flow
market share
10.2% 6.6% 7.9%
>20%

Merchant
Direct tax collection GST market Forex market share
acquisition
22.7% 14.5% 5.7%
15%

Source: Company, HSIE Research

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ICICI Bank: Company Update

Exhibit 16: Corporate ecosystem – business impact on Exhibit 17: Merchant ecosystem – business impact
growth
Growth: FY20 – FY22e (x) (x)
Monthly acquiring volumes Deposits growth (CA MAB)
Corporate asset NII 19% 2.8 2.8
Retail asset NII 22% 2.1
2.1 1.9 2.1
Trade and Forex income 24%
Retail liabilities NII 23% 1.4 1.4
1 1
Corporate liabilities NII 22%
0.7 0.7
Supply chain income 28%
Ecosystem core operating profit 24% 0.0 0.0
Jan'20 Sep'21 Jan'20 Sep'21

Source: Company, HSIE Research Source: Company, HSIE Research | Indexed to Jan’20 as the base

Page | 7
ICICI Bank: Company Update

Valuation and recommendation

 Having stabilized the corporate portfolio from NPA woes, and now delivering on
most metrics across portfolio granularisation, balance sheet growth, reflating
margins and prudent provisioning, ICICI Bank seems to be well on track to
become a steady ~15% ROE franchise. The bank has been at the forefront of
digital initiatives in terms of building in-house as well as through strategic
partnerships.
 We maintain BUY with a revised target price of INR 890 (earlier 885). We value
the standalone bank using RI-based methodology at INR 721 (implied 2.7x Sep’23
ABVPS). The subsidiaries contribute to one-fifth of the target price (after 20%
holding company discount). Most of the subsidiaries of ICICI Bank have scaled
up well, with three of them publicly-listed during the last five years.
Exhibit 18: Change in estimates
FY22E FY23E FY24E
(INR bn)
Old New Change Old New Change Old New Change
Net advances 8,623 8,623 0.0% 10,043 10,043 0.0% 11,684 11,806 1.0%
NIM (%) 3.9 3.9 0 bps 4.1 4.1 0 bps 4.0 4.0 1 bps
NII 461.2 461.2 0.0% 540.9 540.6 0.0% 619.1 623.3 0.7%
PPOP 396.3 396.3 0.0% 473.4 473.2 0.0% 543.4 547.8 0.8%
PAT 214.1 214.1 0.0% 270.6 270.4 -0.1% 314.7 316.9 0.7%
Adj. BVPS (INR) 215.4 215.4 0.0% 248.4 248.4 0.0% 283.8 283.9 0.0%

Exhibit 19: SoTP-based valuation of ICICI Bank

Value Total per share
SoTP valuation % Stake % of TP Valuation Methodology
(INR mn) (INR mn) (INR)
ICICI Bank (standalone, Sep-23 ABV) 4,989,195 100.0% 4,989,195 721 81% RI-based model
ICICI Prudential Life 1,070,259 51.4% 549,792 79 9% HSIE TP
ICICI Lombard General 662,218 48.1% 318,394 46 5% HSIE TP
ICICI Securities 314,167 75.0% 235,625 34 4% HSIE TP
ICICI Prudential AMC 481,705 51.0% 245,670 36 4% 8% of Sep'23 AUM
ICICI Securities Primary Dealership 45,319 100.0% 45,319 7 1% 2x Sep'23 BVPS
ICICI Home Finance 20,076 100.0% 20,076 3 0% 1x Sep'23 BVPS
ICICI Bank UK 18,731 100.0% 18,731 3 0% 0.5x Sep'23 BVPS
ICICI Bank Canada 18,961 100.0% 18,961 3 0% 0.5x Sep'23 BVPS
ICICI Ventures 2,609 100.0% 2,609 0 0% 1x Sep'23 BVPS
Total value of subsidiaries 1,455,177 210 24%
Less: Holding company discount 291,035 42 5% 20% Hold co discount
Total SoTP valuation 6,153,337 890 100%
Source: Company, HSIE Research

Page | 8
ICICI Bank: Company Update

Peer Set Comparison

Mcap ABV (Rs) P/E (x) P/ABV (x) ROAE (%) ROAA (%)
CMP
(INR Rating TP
(INR) FY22E FY23E FY24E FY22E FY23E FY24E FY22E FY23E FY24E FY22E FY23E FY24E FY22E FY23E FY24E
bn)
BANKS
AUBANK 355 1,137 REDUCE 1,148 206 243 288 38.2 31.1 24.3 5.5 4.7 4.0 13.8 14.7 16.1 1.6 1.7 1.8
AXSB# 2,061 673 BUY 957 347 401 457 15.0 10.7 8.6 1.8 1.5 1.3 11.7 14.3 15.3 1.2 1.5 1.6
BANDHAN 446 277 BUY 387 103 131 159 30.6 10.4 8.2 2.7 2.1 1.7 8.1 20.9 21.9 1.2 2.9 3.1
CUBK 106 144 BUY 199 75 88 102 15.1 11.6 9.6 1.9 1.6 1.4 11.4 13.3 14.1 1.3 1.5 1.6
DCBB 26 84 ADD 132 110 124 142 8.3 5.8 5.0 0.8 0.7 0.6 8.0 10.5 11.1 0.8 1.0 1.0
FB 187 89 BUY 120 81 92 103 9.4 7.6 6.2 1.1 1.0 0.9 11.4 12.5 13.6 0.9 1.0 1.1
ICICIBC 4,959 717 BUY 890 215 248 284 19.0 14.6 12.0 2.7 2.3 1.9 13.6 15.2 15.6 1.6 1.8 1.8
IIB 747 951 REDUCE 894 617 694 781 14.1 10.9 9.6 1.5 1.4 1.2 11.3 12.8 13.0 1.4 1.6 1.6
KMB# 3,791 1,913 REDUCE 1,832 333 374 416 40.0 34.5 29.1 4.8 4.2 3.6 11.8 11.9 12.2 2.0 2.0 2.1
KVB 40 50 REDUCE 55 75 81 87 8.1 5.6 4.5 0.7 0.6 0.6 6.9 9.4 10.8 0.6 0.8 0.9
RBK 115 192 REDUCE 181 193 210 233 70.1 10.4 7.5 1.0 0.9 0.8 1.3 8.3 10.7 0.2 0.9 1.2
SBIN# 4,212 472 BUY 572 258 292 336 10.4 6.9 5.2 1.3 1.1 0.8 10.5 13.4 14.5 0.6 0.8 0.9
UJJIVANS 33 19 REDUCE 20 14 17 19 (14.3) 8.6 6.9 1.3 1.1 1.0 (7.4) 12.2 13.7 (1.1) 1.6 1.6
Source: Company, HSIE Research | Note: *CMP as on 03-12-2021, # adjusted for subsidiaries

Page | 9
ICICI Bank: Company Update

Financials
Income Statement
(INR mn) FY18 FY19 FY20 FY21 FY22E FY23E FY24E
Interest earned 549,659 634,012 747,983 791,183 869,642 1,013,431 1,182,082
Interest expended 319,400 363,864 415,313 401,288 408,404 472,797 558,771
Net interest income 230,258 270,148 332,671 389,894 461,238 540,634 623,310
Other income 174,196 145,122 164,486 189,685 191,936 227,171 263,438
Treasury income 57,897 13,394 16,392 51,738 22,295 30,190 34,773
Total income 404,455 415,270 497,157 579,580 653,175 767,805 886,748
Operating expenditure 157,039 180,891 216,144 215,608 256,856 294,609 338,987
Pre-provisioning profit 247,415 234,379 281,013 363,971 396,319 473,196 547,761
Non-tax provisions 173,070 196,610 140,533 162,144 116,442 112,612 125,185
NPA provisions 142,450 168,120 88,144 107,991 109,028 106,838 121,144
Profit before tax 74,345 37,769 140,480 201,827 279,877 360,584 422,577
Tax expenditure 6,571 4,135 61,172 39,900 65,771 90,146 105,644
Profit after tax 67,774 33,634 79,308 161,927 214,106 270,438 316,932
Source: Company, HSIE Research

Balance Sheet
(INR mn) FY18 FY19 FY20 FY21 FY22E FY23E FY24E
Share capital 12,857 12,895 12,948 13,832 13,832 13,832 13,832
Reserves and surplus 1,038,676 1,070,739 1,152,062 1,461,227 1,648,609 1,888,506 2,159,627
Net worth 1,051,588 1,083,680 1,165,044 1,475,090 1,662,441 1,902,338 2,173,459
Deposits 5,609,752 6,529,197 7,709,690 9,325,222 10,710,388 12,434,401 14,734,772
CASA 2,899,253 3,239,403 3,478,185 4,316,234 4,950,052 5,810,015 6,917,997
Borrowings 1,828,586 1,653,200 1,628,968 916,310 954,810 969,390 984,286
Other liabilities and provisions 301,966 378,515 479,950 587,704 553,861 600,356 685,884
Total equity and liabilities 8,791,892 9,644,591 10,983,651 12,304,325 13,881,500 15,906,486 18,578,401

Cash and cash equivalents 841,694 802,963 1,191,557 1,331,283 1,190,731 1,256,057 1,435,465
Investments 2,029,942 2,077,327 2,495,315 2,812,865 3,132,406 3,576,484 4,150,874
Government securities 1,391,853 1,479,231 1,883,319 2,136,208 2,333,040 2,680,758 3,143,812
Advances 5,123,953 5,866,466 6,452,900 7,337,291 8,623,115 10,042,910 11,806,072
Fixed assets 79,035 79,314 84,103 88,776 93,215 97,875 102,769
Other assets 717,268 818,522 759,777 734,112 842,033 933,159 1,083,220
Total assets 8,791,892 9,644,591 10,983,651 12,304,325 13,881,500 15,906,486 18,578,401
Source: Company, HSIE Research

Page | 10
ICICI Bank: Company Update

Key Ratios
FY18 FY19 FY20 FY21 FY22E FY23E FY24E
VALUATION RATIOS
EPS (INR) 11 5 12 23 31 39 46
Earnings Growth (%) -31% -50% 136% 104% 32% 26% 17%
BVPS 164 168 180 213 240 275 314
Adj. BVPS 111 138 155 191 215 248 284
ROAA (%) 0.8% 0.4% 0.8% 1.4% 1.6% 1.8% 1.8%
ROAE (%) 6.6% 3.2% 7.1% 12.3% 13.6% 15.2% 15.6%
P/E (x) 68 137 59 31 23 18 16
P/ABV (x) 6.5 5.2 4.6 3.7 3.3 2.9 2.5
P/PPOP (x) 20.0 21.2 17.6 13.6 12.5 10.5 9.1
PROFITABILITY (%)
Yield on advances 8.4% 8.7% 9.3% 8.3% 8.4% 8.4% 8.4%
Cost of funds 4.6% 4.7% 4.7% 4.1% 3.7% 3.8% 3.8%
Cost of deposits 4.5% 4.4% 4.6% 3.9% 3.7% 3.7% 3.8%
Core spread 3.9% 4.4% 4.8% 4.4% 4.7% 4.7% 4.6%
Net interest margin 3.2% 3.4% 3.7% 3.7% 3.9% 4.1% 4.0%
OPERATING EFFICIENCY
Cost to average assets 1.9% 1.96% 2.10% 1.85% 1.96% 1.98% 1.97%
Cost-income 38.8% 43.6% 43.5% 37.2% 39.3% 38.4% 38.2%
BALANCE SHEET STRUCTURE RATIOS
Loan Growth (%) 10.4% 14.5% 10.0% 13.7% 17.5% 16.5% 17.6%
Deposits Growth (%) 14.5% 16.4% 18.1% 21.0% 14.9% 16.1% 18.5%
C/D ratio (%) 91.3% 89.8% 83.7% 78.7% 80.5% 80.8% 80.1%
Equity/Assets (%) 12.0% 11.2% 10.6% 12.0% 12.0% 12.0% 11.7%
Equity/Loans (%) 20.5% 18.5% 18.1% 20.1% 19.3% 18.9% 18.4%
CASA % 51.7% 49.6% 45.1% 46.3% 46.2% 46.7% 47.0%
CRAR (%) 18.4% 16.9% 16.1% 19.1% 18.4% 17.8% 16.9%
Tier I (%) 15.9% 15.1% 14.7% 18.1% 17.5% 17.1% 16.3%
Asset quality
Gross NPA 532,402 456,760 414,092 408,414 399,201 392,190 415,435
Net NPA 278,236 134,497 99,232 91,176 111,796 123,696 149,337
PCR 47.7% 70.6% 76.0% 77.7% 72.0% 68.5% 64.1%
GNPA % 10.4% 7.8% 6.4% 5.3% 4.5% 3.8% 3.4%
NNPA % 5.4% 2.3% 1.5% 1.2% 1.3% 1.2% 1.3%
Slippages 5.9% 1.9% 2.2% 2.3% 2.7% 2.2% 2.1%
Credit costs 2.9% 3.1% 1.4% 1.6% 1.4% 1.1% 1.1%
ROAA Tree
Net interest income 2.8% 2.9% 3.2% 3.3% 3.5% 3.6% 3.6%
Other income 2.1% 1.6% 1.6% 1.6% 1.5% 1.5% 1.5%
Operating expenditure 1.9% 2.0% 2.1% 1.9% 2.0% 2.0% 2.0%
Non-tax provisions 2.1% 2.1% 1.4% 1.4% 0.9% 0.8% 0.7%
Tax expenditure 0.1% 0.0% 0.6% 0.3% 0.5% 0.6% 0.6%
RoAA 0.8% 0.4% 0.8% 1.4% 1.6% 1.8% 1.8%
Leverage 8.0 8.6 9.2 8.8 8.3 8.4 8.5
RoAE 6.6% 3.2% 7.1% 12.3% 13.6% 15.2% 15.6%
Source: Company, HSIE Research

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ICICI Bank: Company Update

RECOMMENDATION HISTORY
Date CMP Reco Target
ICICI Bank TP
1,000 7-Dec-20 502 BUY 549
900 14-Jan-21 556 BUY 599
1-Feb-21 537 BUY 625
800
12-Apr-21 566 BUY 645
700
26-Apr-21 570 BUY 649
600
16-Jul-21 667 BUY 770
500
26-Jul-21 677 BUY 775
400 18-Oct-21 727 BUY 842
300 25-Oct-21 759 BUY 885
200 06-Dec-21 717 BUY 890
Jul-21
Jan-21

Feb-21

Apr-21

Aug-21

Sep-21

Nov-21
May-21
Mar-21

Jun-21
Dec-20

Dec-21
Oct-21
Rating Criteria
BUY: >+15% return potential
ADD: +5% to +15% return potential
REDUCE: -10% to +5% return potential
SELL: > 10% Downside return potential

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ICICI Bank: Company Update

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