4QFY2012 Result Update | Banking

April 28, 2012

ICICI Bank
Performance Highlights

Particulars (` cr) NII Pre-prov. profit PAT

Source: Company, Angel Research

BUY
CMP Target Price
3QFY12 2,506 2,354 1,503 % chg (qoq) 8.2 14.2 15.0 4QFY11 2,312 2,343 1,437 % chg (yoy) 17.3 14.7 20.3

`869 `1,183
12 Months

4QFY12 2,712 2,687 1,728

Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code

Banking 99,858 1.3 1119/641 653,759 10 17,187 5,209 ICBK.BO ICICIBC@IN

ICICI Bank reported healthy performance for 4QFY2012. Net profit for the bank grew by 20.3% yoy to `1,728cr. Key highlights of the results were a) 33bp
sequential increase in domestic NIMs mainly driven by no securitization losses during the quarter and full impact of base rate hike and b) continued improvement in asset quality front. We maintain our Buy view on the stock. NIMs and asset quality, both improved: During the quarter, advances for the bank increased by healthy 17.3% yoy (3.1% qoq), aided by a strong 29.5% yoy (16.2% qoq) growth in SME book, 26.6% yoy growth in corporate book and 26.0% yoy growth in Overseas book (excl. positive impact of INR depreciation 10.4% yoy). Deposits accretion moderated with growth of 13.2% yoy (sequential decline of 2.0%), mainly on account of subdued current deposits growth and moderate 13.7% yoy saving deposits growth. Consequentially, CASA ratio declined 160bp yoy (10bp qoq) to 43.5%. Domestic NIMs improved by 33bp sequentially to 3.3%; while, Overseas NIMs improved by 12bp qoq to 1.5%. Non-interest income (excl. treasury) increased by only 12.7% yoy, on back of moderation in corporate fee income. Misc. other income for the bank grew to `342cr from `46cr in 4QFY2011, aided mainly by higher dividend income of ~`175cr. The banks asset quality improvement

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 26.9 62.8 10.3

continued during this quarter as well, with both gross and net NPA ratio declining sequentially by 20bp and 10bp, respectively. Provision coverage ratio remained healthy at 80.4%. The banks restructured book grew by `1,186cr (38.6% qoq) to
`4,256cr, in line with the management guidance and primarily included accounts such as GTL and 3i Infotech. The management indicated that no major restructuring is in the pipeline. They also specified that based on their past experiences, slippages from restructured assets is ~5%. Outlook and valuation: The banks substantial branch expansion in the past 3-4 years is expected to sustain a far more favourable deposit mix going forward. Moreover, a lower risk balance sheet has driven down NPA provisioning costs, which we believe will enable RoE of 16% by FY2014E (with further upside from financial leverage). At the CMP, the banks core banking business (after adjusting for subsidiaries) is trading at 1.5x FY2014E ABV (including subsidiaries, at 1.4x FY2014E ABV). We maintain our Buy recommendation on the stock with a target price of `1,183.

Abs. (%) Sensex ICICI Bank

3m (0.3) (2.2)

1yr (10.9) (22.2)

3yr 56.2 97.8

Key financials
Y/E March (` cr) NII % chg Net profit % chg NIM (%) EPS (`) P/E (x) P/ABV (x) RoA (%) RoE (%)
Source: Company, Angel Research

FY2011 9,017 11.1 5,151 28.0 2.6 44.7 19.4 1.8 1.3 11.7

FY2012 10,734 19.0 6,465 25.5 2.7 56.0 15.5 1.7 1.4 13.5

FY2013E 13,180 22.8 7,843 21.3 2.8 67.9 12.8 1.5 1.5 14.7

FY2014E 15,462 17.3 9,369 19.5 2.8 81.1 10.7 1.4 1.5 16.0

Vaibhav Agrawal
022 3935 7800 Ext: 6808 [email protected]

Varun Varma
022 3935 7800 Ext: 6847 [email protected]

Sourabh Taparia
022 3935 7800 Ext: 6872 [email protected]

Please refer to important disclosures at the end of this report

ICICI Bank | 4QFY2012 Result Update

Exhibit 1: 4QFY2012 performance

Particulars (` cr) Interest earned - on Advances / Bills - on investments - on balance with RBI & others - on others Interest Expended Net Interest Income Other income Other income excl. treasury - Fee income - Treasury income - Other income Operating income Operating expenses - Employee expenses - Other Opex Pre-provision Profit Provisions & Contingencies PBT Provision for Tax PAT Effective Tax Rate (%)
Source: Company, Angel Research

4QFY12 3QFY12 % chg (qoq) 4QFY11 % chg (yoy) 9,175 6,128 2,615 128 303 6,070 3,105 2,228 2,070 1,728 158 342 5,333 2,222 1,103 1,119 3,112 469 2,642 741 1,902 28.0 8,592 5,686 2,473 134 299 5,880 2,712 1,892 1,957 1,701 (65) 256 4,604 1,917 837 1,080 2,687 341 2,346 618 1,728 26.3 6.8 7.8 5.8 (4.6) 1.2 3.2 14.5 17.8 5.8 1.6 (343.1) 33.8 15.8 15.9 31.9 3.6 15.8 37.6 12.6 19.8 10.0 169bp 7,156 4,535 2,209 91 321 4,647 2,510 1,641 1,837 1,791 (196) 46 4,150 1,845 857 989 2,305 384 1,921 469 1,452 24.4 28.2 35.1 18.4 40.5 (5.6) 30.6 23.7 35.8 12.7 (3.5) (180.6) 649.9 28.5 20.4 28.8 13.1 35.0 22.3 37.5 57.8 31.0 360bp

Exhibit 2: 4QFY2012 Actual vs. estimates

Particulars (` cr) Net interest income Other income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Company, Angel Research

Actual 3,105 2,228 5,333 2,222 3,112 469 2,642 741 1,902

Estimates 2,844 2,032 4,875 2,051 2,824 476 2,348 629 1,719

Var. (%) 9.2 9.7 9.4 8.3 10.2 (1.5) 12.5 17.7 10.7

April 28, 2012

ICICI Bank | 4QFY2012 Result Update

Exhibit 3: 4QFY2012 performance analysis

Particulars Balance sheet Advances (` cr) Deposits (` cr) Credit-to-Deposit Ratio (%) Current deposits (` cr) Saving deposits (` cr) CASA deposits (` cr) CASA ratio (%) CAR (%) Tier 1 CAR (%) Profitability Ratios (%) Reported NIM Cost-to-income ratio Asset quality Gross NPAs (` cr) Gross NPAs (%) Net NPAs (` cr) Net NPAs (%) Provision Coverage Ratio (%) Provision exps. to avg. assets (%)
Source: Company, Angel Research

4QFY12 3QFY12 % chg (qoq) 4QFY11 % chg (yoy) 253,728 246,157 255,500 260,589 99.3 34,973 76,046 43.5 18.5 12.7 3.0 41.7 9,475 3.6 1,861 0.7 80.4 0.4 94.5 40,039 73,498 43.6 18.9 13.1 2.7 41.6 9,723 3.8 2,048 0.8 78.9 0.3 3.1 216,366 (2.0) 225,602 484bp (12.7) 3.5 (12)bp (36)bp (45)bp 31bp 2bp (2.5) (20)bp (9.1) (10)bp 150bp 10bp 95.9 34,878 66,869 45.1 19.5 13.2 2.7 44.5 10,034 4.5 2,407 1.1 76.0 0.4 17.3 13.3 340bp 0.3 13.7 9.1 (165)bp (102)bp (49)bp 27bp (281)bp (5.6) (85)bp (22.7) (38)bp 439bp 2bp

111,019 113,537

(2.2) 101,747

Overall NIMs improve 27bp sequentially

During 4QFY2012, advances for the bank increased by healthy 17.3% yoy (3.1% qoq), aided by a strong 29.5% yoy (16.2% qoq) growth in SME book, 26.6% yoy growth in corporate book and 26.0% yoy growth in Overseas book (excl. the positive impact of INRs depreciation, the growth in international advances would have been much lower at 10.4% yoy). Rural segment loans grew at 6.4% yoy (27.8% qoq on account of year ending phenomena of higher priority sector lending in the last quarter). Retail loans grew by 7.6% yoy (9.2% qoq), partly due to the banks conscious strategy to reduce the share of unsecured personal and credit card loans. Personal loans came off by a sharp 57.7% yoy, while credit card debt declined by 8.7% yoy. Secured vehicle and housing advances grew by 18.0% and 6.9% yoy, respectively. Consequently, the retail segments overall contribution to the advances book came at 35.5% as of 4QFY2012 as against 38.7% as of 4QFY2011 (33.5% in 3QFY2012). Deposits accretion moderated during the quarter with growth of 13.2% yoy (sequential decline of 2.0%), mainly on account of subdued current deposits growth and moderate 13.7% saving deposits growth. Consequentially, credit to deposit ratio for the bank rose sharply to 99.3% in 4QFY2012 from 95.9% in 4QFY2011 and 94.5% in 3QFY2012. Muted growth in current deposits and moderate growth in saving deposits led the CASA ratio for the bank to decline 160bp yoy (10bp sequentially) to 43.5%.

April 28, 2012

ICICI Bank | 4QFY2012 Result Update

Reported overall NIM improved by 27bp sequentially to 3.01%, on account of improvement in both domestic and international NIMs. Domestic NIMs improved by 33bp qoq to 3.3%, aided by higher investment income on account of no securitization loss during the quarter and higher yield on advances on account of full impact of base rate hike. Overseas NIM improved by 12bp qoq to 1.52% mainly on account of higher yield on advances. Going ahead, Management expects the banks domestic loan book to grow by ~20% in FY2013 mainly driven by corporate and secured retail loans. They anticipate the banks consolidation in overseas loan book to continue in current year as well. According to the management, while 1QFY2013 NIMs are likely to be sequentially lower due to priority sector lending, overall NIMs are expected to improve by 10-15bp in FY2013 as compared to FY2012.

Exhibit 4: Consolidation in unsecured retail advances continue

Particulars (` cr) Rural Overseas Corporate SME Retail - Housing - Vehicle - Personal - Credit cards - Other retail Total Advances 4QFY12 3QFY12 % chg (qoq) 4QFY11 % chg (yoy) % to total 22,328 69,521 58,357 13,448 90,073 57,647 26,572 991 2,522 17,477 69,663 64,986 11,569 82,463 54,755 22,182 990 2,474 27.8 (0.2) (10.2) 16.2 9.2 5.3 19.8 0.1 1.9 20,987 55,173 46,086 10,386 83,734 53,924 22,524 2,345 2,763 6.4 26.0 26.6 29.5 7.6 6.9 18.0 (57.7) (8.7) 7.6 17.3 8.8 27.4 23.0 5.3 35.5 22.7 10.5 0.4 1.0 0.9 100.0

2,342 2,062 253,728 246,157

13.6 2,177 3.1 216,366

Source: Company, Angel Research

Exhibit 5: CDR picks due to moderation in deposits gr.

Adv. qoq growth 9.0 6.0 3.0 (3.0) 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12
Source: Company, Angel Research

Exhibit 6: CASA ratio remain flat sequentially

CASA ratio (%) 45.0
20.8 18.0 14.2 9.1 5.1

Dep. qoq growth

CDR (%, RHS) 99 110 100 90 80 70 60 25.0

CASA yoy growth (%) 25.0 20.0 15.0 10.0

96

96

95

94

35.0

43.5

45.1

41.9

42.1

5.0 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12

Source: Company, Angel Research

43.6

15.0

5.0 -

April 28, 2012

ICICI Bank | 4QFY2012 Result Update

Exhibit 7: NIMs improve sharply by 27bp qoq

NIM (Reported, %) 3.0 3.0 2.8 2.6 2.4 2.2 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 2.7 2.6 2.6 2.7

Exhibit 8: NII growth trends

NII (` cr) 3,200 3,050 2,900 2,750 2,600 2,450 2,300 2,150 2,000 23.3 21.1 17.3 13.7 YoY growth (%, RHS) 23.7 25.0 20.0 15.0 10.0 5.0 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12
Source: Company, Angel Research

Source: Company, Angel Research

Fee income moderation continues

During 4QFY2012, non interest income excl. treasury for the bank increased by 12.7% yoy to `2,070cr, on back of moderation in fee income. Fee income declined by 3.5% yoy due to moderation in corporate fee income despite traction witnessed in income from transaction banking and remittance segments. Treasury income came in at `158cr as against loss of `196cr in 4QFY2011, on account of higher proprietary trading income and improved performance on equity portfolio, despite MTM losses on security receipts. Other income for the bank grew to `342cr from `46cr in 4QFY2011, mainly aided by dividend income of `100cr received from ICICI Bank UK and ~`75cr from its life insurance subsidiary. Going ahead, the management expects fee income growth to be in low double digits in FY2013, on account of, continued traction anticipated in transaction banking and remittance business; while stabilization expected in corporate fee income.

Exhibit 9: Other Income aided by dividends from subsidiaries

Particulars (` cr) Fee income Treasury Others Other income Other income excl. treasury
Source: Company, Angel Research

4QFY12 3QFY12 1,728 158 342 2,228 2,070 1,701 (65) 256 1,892 1,957

% chg (qoq) 1.6 (343.1) 33.6 17.8 5.8

4QFY11 1,791 (196) 46 1,641 1,837

% chg (yoy) (3.5) (180.6) 648.9 35.8 12.7

April 28, 2012

ICICI Bank | 4QFY2012 Result Update

Exhibit 10: Fee income moderation continues

1,900 1,800 1,700 1,600 Fee Income (` cr) 17.8 11.7 6.9 4.7
(3.5)

Exhibit 11: Still healthy share of fee income in RoA

20.0 15.0 10.0 5.0 2.0 1.8 1.6 1.4 1.2 1.0 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 1.8 1.5 1.6 1.5 Fee income to average assets (%)

yoy growth (%, RHS)

1.5

1,791

1,578

1,700

1,701

1,500 1,400

1,728

(5.0) (10.0)

4QFY11 1QFY12 2QFY12 3QFY12 4QFY12

Source: Company, Angel Research

Source: Company, Angel Research

Asset quality continues to improve

The banks asset quality improvement continued during 4QFY2012 as well, with both gross and net NPA ratio declining sequentially by 20bp and 10bp, respectively. As of 4QFY2012 gross NPA ratio stands at 3.6% (3.8% in 3QFY2012), while net NPA ratio stands at 0.7% (0.8% in 3QFY2012). Provision coverage ratio for the quarter remained healthy at 80.4%.
Gross slippages ratio for FY2012 stood at 1.36%. During the quarter, the banks restructured book grew by `1,186cr (38.6% qoq) to `4,256cr, in line with the management guidance and primarily included accounts such as GTL and 3i Infotech. The management indicated that no major restructuring is in the pipeline. They also specified that based on their past experiences, slippages from restructured assets is ~5%. Further they guided for credit cost to be 75bp for FY2013.

Exhibit 12: Restructured loans rise during 4QFY2012

(` cr) 4,500 3,750 3,000 2,250 1,500 750 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 1,970 1,966 2,501 3,070 4,256

Exhibit 13: Declining NPAs with improving coverage

Gross NPAs (%) 5.0 4.0 3.0 2.0 76.0 76.9 78.2 78.9 Net NPAs (%) Coverage ratio (%, RHS) 80.4 85.0 80.0 75.0 70.0

4.5 1.1

4.4 1.0

4.1 0.9

3.8 0.8

4QFY11

3.6 0.7
4QFY12

1.0

65.0 60.0

1QFY12

2QFY12

3QFY12

Source: Company, Angel Research

Source: Company, Angel Research

Operating costs rise due to higher employee bonus provisions

Operating expenses increased by 20.5% yoy (16.0% qoq), primarily due to increase of `267cr in employee expenses on the back of higher bonus provisions. Consequently, the operating expenses to average assets ratio increased to 1.9% in 4QFY2012 compared to 1.8% in 4QFY2011 and 1.7% in 3QFY2012. Cost-to-income ratio also inched up sequentially by 10bp to 41.7%. The management expects to contain cost-to-income ratio below 42% in FY2013.
April 28, 2012

ICICI Bank | 4QFY2012 Result Update

Exhibit 14: Staff expenses increased Total Opex

Other opex (` cr) 2,500 Staff exps Opex yoy growth (RHS) (%) 30.0

Exhibit 15: Opex to avg assets ratio increase in 4QFY12

Cost-to-income ratio (%) 50.0 1.8 45.0 20.0 40.0 10.0 1.8 1.8 1.7 Opex to avg assets (%, RHS) 1.9 2.0 1.9 1.8 1.7 1.6

733

1,000

857

1,500

843

837

1,103

2,000

1,087

1,050

1,080

1,119

44.5

44.9

44.6

41.6

989

500 -

41.7

35.0 30.0

1.5 1.4

4QFY11 1QFY12 2QFY12 3QFY12 4QFY12

Source: Company, Angel Research

4QFY11 1QFY12 2QFY12 3QFY12 4QFY12

Source: Company, Angel Research

Under-leveraged branch network

The number of branches for the bank has almost doubled over the past three years. Branch network improvement was partly aided by the merger with the Bank of Rajasthan. This extensive pan India network of 2752 branches as of 4QFY2012 is under-leveraged, as reflected in the falling CASA deposits/branch of ~`40cr compared to `65cr as of 3QFY2008 and the total assets/branch of `172cr compared to `394cr as of 3QFY2008. Further, management plans to maintain the branch addition rate in the range of 200-300 in coming year as well. Going forward, we expect the bank to leverage this network to grow its CASA market share.

Exhibit 16: Robust branch expansion

2,700

Exhibit 17: Under-leveraged branch network

Total Assets/Branch (` cr) CASA Deposits/Branch (` cr, RHS)

2,529

2,250 1,800 1,350 900 450 -

2,752

450 360 270 180 90 3QFY08 4QFY08 1QFY09 2QFY09 3QFY09 4QFY09 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12
Source: Company, Angel Research

70 60 50 40 30 20 10 -

Source: Company, Angel Research

April 28, 2012

3QFY08 4QFY08 1QFY09 2QFY09 3QFY09 4QFY09 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12

1,308

1,438

1,741

Overview of performance of subsidiaries

Consolidated net profit for FY2012 rose by a healthy 25.4% yoy to `7,643cr (ex ICICI General additional third party motor pool losses, consolidated net profit would have grown by 33.6% to `8,146cr). Consolidated reported RoEs for FY2012 improved to 13.0% from 11.6% in FY2011. However, overseas subsidiaries of the bank (viz. ICICI Bank Canada and ICICI Bank UK) continue to remain a drag on the consolidated RoEs, as both remain over capitalized, reflecting banks strategy of consolidating their

ICICI Bank | 4QFY2012 Result Update

operations (CAR in excess of 31% in both), and profitability continue to decline for ICICI Bank UK (US$ 25.4mn in FY2012 vs. US$ 36.6mn in FY2011). The bank received ~`100cr as dividend from its UK subsidiary in 4QFY2012 and similar discussions are in progress with the Canadian regulator. In the short term, we expect the over-capitalized subsidiaries to drag the consolidated RoEs. ICICI Prudential Life reported PAT of `1,384cr for FY2012 (growth of 72.4% yoy) and maintained its leadership position with a market share based on retail weighted received premium of 5.9%. ICICI Lombard General Insurance reported loss after tax of `416cr for FY2012 (vs. loss after tax of `80cr in FY2011) after recognizing additional third party motor pool losses of `685cr. Management expects the company to turn profitable in FY2013, despite some more impact of third party motor pool liabilities on account of actuarial valuation anticipated in FY2013. FY2012 performance for other smaller subsidiaries was mixed. ICICI securities PD and ICICI AMC reported PAT growth of 62.3% and 22.2%, respectively. While ICICI securities and ICICI ventures reported PAT de-growth of 31.9% and 8.1%, respectively.

Exhibit 18: Performance of subsidiaries

Subsidiary ICICI Bank UK ICICI Bank Canada ICICI Bank Eurasia ICICI Home Finance ICICI Prudential Life Insurance Parameter PAT (USD mn) PAT (CAD mn) PAT (USD mn) PAT (` cr) APE (` cr) NBP (` cr) NBP margin (%) AuM (` cr) PAT (` cr) ICICI Lombard Gen. Insurance ICICI Securities ICICI Securities PD ICICI Venture ICICI Prudential AMC
Source: Company, Angel Research

FY2012 25.4 34.4 4.3 260 3,118 500 16.0 70,771 1,384 5,358 (416) 77 86 68 88

FY2011 36.6 32.4 233 3,975 713 17.9 68,150 808 4,408 (80) 113 53 74 72

% chg (30.6) 6.2 11.6 (21.6) (29.9) (10.6) 3.8 71.3 21.6 (31.9) 62.3 (8.1) 22.2

Gross Premium (` cr) PAT (` cr) PAT (` cr) PAT (` cr) PAT (` cr) PAT (` cr)

April 28, 2012

ICICI Bank | 4QFY2012 Result Update

Investment arguments
Well positioned to garner strong market share gains in CASA deposits
In our view, the banks substantial branch expansion from 955 branches at the end of 3QFY2008 to 2,752 branches by 4QFY2012, and strong capital adequacy, at 18.5% (Tier-I at 12.7%) have positioned it to gain both CASA and credit market share, respectively. In fact, the bank has once again started gaining market share in savings accounts since FY2010. During FY2011, the bank improved its market share of savings deposits by 10bp over FY2010, capturing a substantial 5.8% incremental market share.

Improved deposit mix to lead to better NIM

The banks strategic transformation has expectedly resulted in significantly better balance sheet and earnings quality. The distinguishing feature of the banks performance in FY2010 was the improvement in CASA ratio to 42.1% (transformative considering that the ratio was as low as 22% at the end of FY2007 and 29% even as recently as FY2009). CASA ratio has remained healthy at 43.5% even in 4QFY2012. Apart from the paradigm shift in the deposit mix reflected in its 43.5% CASA ratio, the bank has largely exited unattractive business segments such as small-ticket personal loans in the domestic segment and most non-India related exposures in its international business.

Asset quality trends remain healthy

The banks asset quality continues to show further improvement, with a declining trend in additions to gross as well as net NPAs. For FY2012 gross slippages ratio stood at comfortable ~1.36%. Also, the bank has maintained a comfortable provision coverage ratio of 80.4% in 4QFY2012. Though the banks restructured loans increased by 38.6% qoq during the quarter to `4,256cr, the management indicated that no major restructuring is in the pipeline. Management also specified that based on their past experiences, slippages from restructured assets is ~5%. The reduction in risk profile of advances has expectedly resulted in commensurate decline in NPA provisioning costs and reflected in improved RoA from 1.0% in FY2010 to 1.4% in FY2012.

Valuations attractive
We have a positive view on ICICI Bank, given its market-leading businesses across the financial services spectrum. Moreover, we believe the bank is decisively executing a strategy of consolidation, which has resulted in an improved deposit and loan mix and should drive improved operating metrics over the medium term. The banks substantial branch expansion in the past 3-4 years is expected to sustain a far more favourable deposit mix going forward. Moreover, a lower risk balance sheet has driven down NPA provisioning costs, which we believe will drive 21.3% yoy growth in net profit for FY2013E and enable RoE of 16.0% by FY2014E (with further upside from financial leverage). At the CMP, the banks core banking business (after adjusting `134/share towards value of the subsidiaries) is trading at 1.5x FY2014E ABV (including subsidiaries,
April 28, 2012

ICICI Bank | 4QFY2012 Result Update

the stock is trading at 1.4x FY2014E ABV). We value the banks subsidiaries at `134/share and the core bank at `1,049/share (2.1x FY2014E ABV). We maintain our Buy rating on the stock with a target price of `1,183.

Exhibit 19: SOTP valuation summary

Particulars ICICI Bank Life Insurance General Insurance Others (Home Fin, AMC, VC, Securities Securities PD and Overseas subsidiaries) SOTP value
Source: Angel Research

Target multiple 2.1x FY2014E ABV 15.5x FY2014E NBP 12x FY2012 PAT

Value/share (`) 1,049 60 12 62 1,183

Exhibit 20: Key assumptions

Particulars (%) Credit growth Deposit growth CASA ratio NIMs Other income growth Growth in staff expenses Growth in other expenses Slippages Treasury gain/(loss) (% of investments)
Source: Angel Research

Earlier estimates FY2013 21.0 22.0 44.3 2.6 26.4 20.0 20.0 1.7 78.0 FY2014 22.0 22.0 44.0 2.6 21.8 22.0 22.0 1.7 75.0

Revised estimates FY2013 18.0 19.0 43.5 2.8 20.7 22.0 15.0 1.5 80.0 FY2014 23.0 23.0 42.9 2.8 22.8 22.0 18.0 1.6 75.0

Exhibit 21: Change in estimates

FY2013 Particulars (` cr) NII Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Angel Research

Earlier estimates 12,418 9,191 21,609 9,216 12,393 1,701 10,691 3,168 7,524

Revised Var. (%) estimates 13,180 6.1 9,029 22,209 9,274 12,935 1,782 11,153 3,311 7,843 (1.8) 2.8 0.6 4.4 4.7 4.3 4.5 4.2

Earlier estimates 14,941 11,164 26,105 11,244 14,862 1,777 13,085 4,069 9,016

FY2014 Revised Var. (%) estimates 15,462 3.5 11,051 26,512 11,115 15,397 1,790 13,607 4,238 9,369 (1.0) 1.6 (1.1) 3.6 0.8 4.0 4.2 3.9

April 28, 2012

10

ICICI Bank | 4QFY2012 Result Update

Exhibit 22: Angel EPS forecast vs. consensus

Year (`) FY2013E FY2014E Angel forecast 67.9 81.1 Bloomberg consensus 64.6 76.9 Var. (%) 5.1 5.5

Source: Bloomberg, Angel Research

Exhibit 23: P/ABV band

Price (`) 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 1x 1.5x 2x 2.5x 3x

Source: Company, Angel Research

Exhibit 24: P/E band

Price (`) 2,800 2,400 2,000 1,600 1,200 800 400 0
Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Apr-05 Apr-06 Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Aug-05 Aug-06 Aug-07 Aug-08 Aug-09 Aug-10 Aug-11 Apr-12

Source: Company, Angel Research

April 28, 2012

Apr-02 Sep-02 Feb-03 Jul-03 Dec-03 May-04 Oct-04 Mar-05 Aug-05 Jan-06 Jun-06 Nov-06 Apr-07 Sep-07 Feb-08 Jul-08 Dec-08 May-09 Oct-09 Mar-10 Aug-10 Jan-11 Jun-11 Nov-11 Apr-12 Sep-12 Feb-13
7x 17x 27x 37x

11

ICICI Bank | 4QFY2012 Result Update

Exhibit 25: ICICI Bank Premium/Discount to the Sensex

(%) 100 80 60 40 20 0 (20) (40) Premium/Discount to Sensex Avg. Historical Premium

Dec-06

Dec-07

Dec-08

Dec-09

Dec-10

Aug-06

Aug-07

Aug-08

Aug-09

Aug-10

Aug-11

Dec-11

Apr-06

Apr-07

Apr-08

Apr-09

Apr-10

Apr-11

Source: Bloomberg, Angel Research

Exhibit 26: Recommendation summary

Company AxisBk FedBk HDFCBk ICICIBk* SIB YesBk AllBk AndhBk BOB BOI BOM CanBk CentBk CorpBk DenaBk IDBI# IndBk IOB J&KBk OBC PNB SBI* SynBk UcoBk UnionBk UtdBk VijBk Reco. Buy Neutral Neutral Buy Neutral Buy Buy Accumulate Buy Buy Buy Buy Neutral Buy Buy Buy Accumulate Buy Neutral Buy Buy Buy Buy Neutral Buy Buy Neutral CMP (`) 1,121 417 543 869 24 350 165 115 764 337 51 430 95 410 91 101 213 87 895 242 839 2,131 101 76 219 65 57 Tgt. price (`) 1,587 1,183 470 205 125 943 392 62 532 508 118 117 240 104 296 1,138 2,593 128 266 87 Upside (%) 41.6 36.1 34.3 24.9 8.6 23.4 16.2 21.0 23.6 23.9 29.6 15.2 12.8 19.8 22.7 35.6 21.7 26.9 21.5 33.9 FY2014E P/ABV (x) 1.5 1.0 3.1 1.4 1.0 1.8 0.6 0.7 0.9 0.9 0.6 0.7 0.8 0.6 0.6 0.6 0.7 0.5 0.8 0.5 0.8 1.3 0.6 0.7 0.7 0.5 0.7 FY2014E Tgt P/ABV (x) 2.2 1.0 3.3 1.9 1.1 2.4 0.8 0.8 1.1 1.0 0.8 0.9 0.8 0.7 0.7 0.7 0.8 0.7 0.8 0.7 1.1 1.6 0.8 0.8 0.9 0.7 0.7 FY2014E P/E (x) 8.1 7.3 15.3 10.7 6.0 8.4 4.0 4.3 5.0 5.2 3.8 4.5 4.8 3.7 3.6 4.2 4.4 4.1 4.6 4.0 4.7 7.9 3.7 4.0 4.4 3.0 4.9
#

FY2012-14E EPS CAGR (%) 16.4 13.0 27.0 20.4 6.7 22.5 (2.1) 6.5 12.2 21.3 26.8 10.9 45.7 2.5 6.2 22.7 5.4 29.9 8.8 17.1 8.8 23.6 8.7 7.7 27.2 11.4 14.2

FY2014E RoA (%) 1.5 1.3 1.7 1.5 0.9 1.4 1.0 1.0 1.1 0.8 0.9 0.9 0.5 0.8 0.9 0.9 1.2 0.6 1.4 0.8 1.1 1.0 0.8 0.7 0.8 0.7 0.5

FY2014E RoE (%) 20.3 14.5 22.1 16.0 17.7 23.3 17.0 16.7 19.2 16.5 17.5 16.7 13.8 16.2 16.9 14.8 18.2 13.9 18.6 13.6 18.5 19.1 17.2 16.2 17.4 16.0 13.2

Source: Company, Angel Research; Note:*Target multiples=SOTP Target Price/ABV (including subsidiaries), Without adjusting for SASF

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ICICI Bank | 4QFY2012 Result Update

Income statement
Y/E March (` cr) Net Interest Income - YoY Growth (%) Other Income - YoY Growth (%) Operating Income - YoY Growth (%) Operating Expenses - YoY Growth (%) Pre - Provision Profit - YoY Growth (%) Prov. & Cont. - YoY Growth (%) Profit Before Tax - YoY Growth (%) Prov. for Taxation - as a % of PBT PAT - YoY Growth (%) FY09 9,092 10.9 7,783 (12.3) 16,875 (1.2) 7,045 (13.6) 9,830 10.1 5,048 30.4 4,782 (5.4) 1,359 28.4 3,423 (17.7) FY10 8,114 (10.8) 7,478 (3.9) 15,592 (7.6) 5,860 (16.8) 9,732 (1.0) 4,390 (13.0) 5,342 11.7 1,317 24.7 4,025 17.6 FY11 9,017 11.1 6,648 (11.1) 15,665 0.5 6,617 12.9 9,048 (7.0) 2,290 (47.8) 6,758 26.5 1,606 23.8 5,151 28.0 FY12 10,734 19.0 7,503 12.9 18,237 16.4 7,850 18.6 10,387 14.8 1,583 (30.9) 8,803 30.3 2,338 26.6 6,465 25.5 FY13E 13,180 22.8 9,029 20.3 22,209 21.8 9,274 18.1 12,935 24.5 1,782 12.5 11,153 26.7 3,311 29.7 7,843 21.3 FY14E 15,462 17.3 11,051 22.4 26,512 19.4 11,115 19.8 15,397 19.0 1,790 0.5 13,607 22.0 4,238 31.1 9,369 19.5

Balance sheet
Y/E March (` cr) Share Capital - Equity - Preference Reserve & Surplus Deposits - Growth (%) Borrowings Tier 2 Capital Other Liab. & Prov. Total Liabilities Cash Balances Bank Balances Investments Advances - Growth (%) Fixed Assets Other Assets Total Assets - Growth (%) FY09 1,463 1,113 350 48,420 218,348 (10.7) 67,324 25,482 18,265 379,301 17,536 12,430 103,058 218,311 (3.2) 3,802 24,164 379,301 (6.3) FY10 1,465 1,115 350 50,503 202,017 (7.5) 60,947 32,967 15,501 363,400 27,514 11,359 120,893 181,206 (17.0) 3,213 19,215 363,400 (4.4) FY11 1,502 1,152 350 53,939 225,602 11.7 72,813 36,391 15,987 406,234 20,907 13,183 134,686 216,366 19.4 4,744 16,347 406,234 12.1 FY12 1,505 1,155 350 59,250 255,500 13.3 90,027 49,788 17,577 473,647 20,461 15,768 159,560 253,728 17.3 4,615 19,515 473,647 17.3 FY13E 1,505 1,155 350 63,695 304,045 19.0 103,851 50,784 20,588 544,468 18,243 18,189 180,962 299,399 18.0 5,164 22,512 544,468 15.4 FY14E 1,505 1,155 350 69,010 373,975 23.0 123,522 51,800 25,428 645,241 22,439 21,635 200,173 368,260 23.0 5,957 26,776 645,241 18.9

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ICICI Bank | 4QFY2012 Result Update

Ratio analysis
Y/E March Profitability ratios (%) NIMs Cost to Income Ratio RoA RoE B/S ratios (%) CASA Ratio Credit/Deposit Ratio CAR - Tier I Asset Quality (%) Gross NPAs Net NPAs Slippages Loan Loss Prov. /Avg. Assets Provision Coverage Per Share Data (`) EPS ABVPS (75% cover.) DPS Valuation Ratios PER (x) P/ABVPS (x) Dividend Yield DuPont Analysis NII (-) Prov. Exp. Adj. NII Treasury Int. Sens. Inc. Other Inc. Op. Inc. Opex PBT Taxes RoA Leverage RoE 2.4 1.3 1.1 0.5 1.5 1.6 3.1 1.9 1.3 0.4 0.9 10.1 9.2 2.3 1.2 1.0 0.2 1.2 1.8 3.0 1.6 1.4 0.4 1.0 9.5 9.7 2.4 0.6 1.8 (0.1) 1.7 1.7 3.5 1.8 1.7 0.4 1.3 9.2 11.7 2.5 0.4 2.1 (0.0) 2.1 1.7 3.8 1.8 2.0 0.5 1.4 9.5 13.5 2.7 0.4 2.3 0.0 2.3 1.7 4.0 1.9 2.2 0.7 1.5 9.9 14.7 2.7 0.3 2.3 0.0 2.4 1.8 4.2 1.9 2.2 0.7 1.5 10.6 16.0 28.3 2.0 1.3 24.1 1.9 1.4 19.4 1.8 1.6 15.5 1.7 2.1 12.8 1.5 2.6 10.7 1.4 3.1 30.7 425.7 11.0 36.1 449.8 12.0 44.7 478.3 14.0 56.0 522.9 18.5 67.9 561.4 22.5 81.1 607.4 27.0 4.3 2.1 2.2 1.0 52.8 5.1 2.1 1.5 1.2 59.5 4.5 1.1 1.5 0.5 76.0 3.6 0.7 1.4 0.3 80.4 3.7 0.8 1.5 0.3 80.0 3.8 1.0 1.6 0.3 75.0 28.7 100.0 15.5 11.8 41.7 89.7 19.4 14.0 45.1 95.9 19.5 13.2 43.5 99.3 18.5 12.7 43.5 98.5 22.2 12.3 42.9 98.5 19.8 11.3 2.6 41.7 0.9 9.2 2.4 37.6 1.0 9.7 2.6 42.2 1.3 11.7 2.7 43.0 1.4 13.5 2.8 41.8 1.5 14.7 2.8 41.9 1.5 16.0 FY09 FY10 FY11 FY12 FY13E FY14E

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ICICI Bank | 4QFY2012 Result Update

Research Team Tel: 022 - 39357800

E-mail: [email protected]

Website: www.angelbroking.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

ICICI Bank No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors

Ratings (Returns):

Buy (> 15%) Reduce (-5% to 15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

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