ICICI Bank reported F4Q10 earnings at Rs. 10 bn (-9% QoQ / +35% YoY) vs. our expectation of Rs. 10.6 bn. Asset quality trends and CASA ratios continued
to improve. However, core revenue progression was tepid at +2% QoQ, weighed down by NII even as fee income growth picked up. Costs were up as the bank
made provisions for bonus payments for the full year during this quarter.
ICBK is lagging on key ‘expected’ areas of change – a) NIMs remain flat, lagging peers and market forecasts; b) Growth is not yet visible (while peers are on a dash); c) ‘Low value’ foreign book is not unwinding fast enough (more a market expectation than management direction); and d) Management’s ‘guidance/direction’ on growth/profitability is not decisive. This is what the marketing has positioned for – has not happened in 4Q10.
ICICI Bank's EPS for FY 11 and FY 12 and Target Prices are as follows,
Citi - Rs 43 and Rs 57 Target 1065
Morgan - Rs 48 and Rs 63 Target 1000
Merrill - Rs 48 and Rs 64 Target 1200
Kotak - Rs 46 and Rs 58 Target 980
