ICICI Bank is the 2^nd largest private sector bank in India offering a diversified portfolio of financial products and services to retail, SME, and corporate customers. The Bank has an extensive network of branches, ATMs and other touch-points. The ICICI group has presence in businesses like life and general insurance, housing finance, primary dealership, etc, through its subsidiaries and associates.

Presently, the bank operates a network of 6371 branches and 17037 ATMs across India and 30% of its branches are in metro cities. It also has international presence, with branches in the US (New York), Singapore, Bahrain, Hong Kong, Dubai International Finance Centre, South Africa, China, Offshore Banking Unit (OBU), and International Financial Services Centre (IFSC), along with representative offices in the US (Texas and California), UAE, Bangladesh, Malaysia, Nepal, and Indonesia. The bank also has wholly-owned banking subsidiaries in the UK and Canada, with branches across both countries and ICICI Bank UK also has an offshore branch in Germany.

Company has very well expanded itself in Digital Banking and Payments offerings. As on March ‘24, company recorded 18.3% market share tin UPI payments on Payments to Merchant basis with 13.2% Y-o-Y growth in Volume and 67.7% Y-o-Y growth in value. It has 29.7% market share in Electronic Toll collection through Fastag with 14.5% Y-o-Y growth in March 2024. It issued 4.9Mn+ Amazon Pay Credit Cards and recorded Rs. 902.29 Bn spends through 17 Mn credit cards while on the other side company has also recorded decline in debit card spends with Rs. 155.43 Bn spend through 32.3 Mn debit cards. In Fy24, 38% Personal loan disbursements were processed fully self-serviced, 56% were Digitally processed and physically assisted and only 7% were non digital, 81% credit cards were Digitally processed and physically assisted and 19% were fully self-serviced process.  The bank sanctioned 35% Mortgages through fully self-service process, 59% through digital process and physical assistance and 6% in non-digital manner. Company opened 60% FDs in fully self-service manner and 40% through Non – Digital process.

Company has a well-diversified Loan Portfolio of total advances standing at Rs. 11844.06 Bn in March 2024, marking a 16.2% growth out of which 97.2% was Domestic and 2.8% was overseas. Out of total loan disbursements 54.9% was Retail segment, 8.4% were rural loans, 7.7% were Business Banking, 5.0% were SME and 21.3% were Domestic corporate and others.

Company’s 85% Mortgage customers had existing relationship with the Bank with Average ticket size of home loan at ₹ 3.5 mn.  Company’s Loan Book had 60% Average loan to value ratio of home loan and ~40% Average loan-to - value ratio of loan against property. In auto loan disbursements 75% Auto loan customers had liability relationship with the Bank and 85% processing of loan was done digitally with 85% being new vehicles and 15% being used vehicles. In SME and Business banking segment company’s loan portfolio has ₹ 100 million Average ticket size of the incremental sanctions in SME and ₹15 million Average ticket size of business banking loan in FY2024 with 90% Of business banking book fully collateralized with a collateral cover of >100%.

Company’s Overseas branches has Total outstanding of USD 3,11 billion at Mar 31, 2024.

Fundamentals:

Financial Highlights:

Company’s Profit before tax excluding treasury, grew by 19.2% y-o-y to ₹ 146.02 bn in Q4-2024; 28.3% y-o-y to ₹ 544.79 bn in FY2024. Its Core operating profit grew by 10.5% y-o-y to ₹ 153.20 bn in Q4-2024; 18.3% y-o-y to ₹ 581.22 bn in FY2024. Company had Provisions of ₹ 7.18 bn in Q4-2024 (0.24% of average advances) and ₹ 36.43 bn (0.32% of average advances) in FY2024. ICICI bank’s Profit after tax grew by 17.4% y-o-y to ₹ 107.08 bn in Q4-2024; 28.2% y-o-y to ₹ 408.88 bn in FY2024.

In FY 24, Company’s total deposits grew by 19.6% y-o-y and 6.0% q-o-q, term deposits grew by 27.7% y-o-y and 1.6% q-o-q, Average current account deposits increased by 13.0% y-o-y and 4.6% q-o-q and Average savings account deposits increased by 4.6% y-o-y and 2.2% q-o-q.

In offerings segment, Company’s Domestic loans grew by 16.8% y-o-y and 3.2% q-o-q, Retail loans grew by 19.4% y-o-y and 3.7% q-o-q, Business banking portfolio grew by 29.3% y-o-y and 5.7% q-o-q, SME portfolio grew by 24.6% y-o-y and 3.8% q-o-q and Domestic corporate portfolio grew by 10.0% y-o-y and 0.8% q-o-q.

On performance front Bank’s Net NPA ratio declined to 0.42% from 0.44% in Fy2. Company’s Net additions stood at ₹ 12.21 bn to gross NPAs in Q4-2024 with Provision coverage at 80.3% and Contingency provisions of ₹ 131.00 bn as on March, 2024. Its NII stood at Rs. 190.93 billion in Q4FY24 with 8.1% growth on Q-o-Q basis. Company reported NIM of 4.53 in FY24 against 4.48 in FY23.

Performance of Company’s subsidiaries:

Figure 1 : Source Company Presentation

• ICICI Prudential Life Insurance’s Annualized premium equivalent (APE) was ₹ 90.46 billion in FY2024 (FY2023) ₹ 86.40 billion).
• ICICI Lombard General Insurance’s Gross direct premium income (GDPI) grew by 17.8% y-o-y to ₹ 210.25 billion in FY2024 and the bank is the Leading private sector non-life insurer in India with a market share of 8.6% at March 31, 2024.
• ICICI Securities’ NSE active clients1 market share at 4.6% at March 31, 2024 compared to 5.3% at December 31, 2023. Its Retail equity market share was 12.7% in Q4-2024 compared to 13.1% in Q3-2024. Company’s Market share in commodity trading segment was 7.1% in Q4-2024 compared to 7.5% in Q3-2024.
• ICICI AMC’s AAUM3 grew by 36.7% y-o-y to ₹ 6,831 billion in Q4-2024. The company emerged as a Market leader in equity and hybrid AUM with market share of 13.6% at March 31, 2024.

Key Updates:

1. ICICI Bank recently launched its ‘Student Sapphiro Forex Card’, a premium forex prepaid card crafted specifically for students who are going abroad for higher education. The card, powered by Visa, provides exclusive benefits and convenience to students as well as their parents to manage education related expenses abroad such as admission fees, course-related fees and other day-to-day expenses including travel, dining and groceries, among others. The card offers the freedom of loading and transacting in 15 currencies, without any cross-currency mark-up charge being levied by the Bank, allowing students to conveniently travel across the globe even if they load only one currency on the card.
2. Bank has also launched ‘SmartLock’, a unique safety measure to enable its customers to lock/unlock multiple banking services instantly, without seeking the help from a customer care executive through phone or e-mail. SmartLock’, the first-of-its-kind measure in the Indian banking sector, also allows customers to lock/unlock the entire iMobile Pay. It empowers customers to lock/unlock access to internet banking, UPI (including payments from other UPI apps linked to the Bank account), credit and debit cards, simply by clicking a button, thereby taking safety of their account in their own hands.
3. Adani One and ICICI Bank recebntly launched India’s first co-branded credit cards with airport-linked benefits in collaboration with Visa. Available in two variants – Adani One ICICI Bank Signature Credit Card and Adani One ICICI Bank Platinum Credit Card – offers a comprehensive and substantial reward programme. It offers up to 7% Adani Reward Points on spends across the Adani Group consumer ecosystem like Adani One app, where one can book flights, hotels, trains, buses, and cabs; Adani-managed airports; Adani CNG pumps; Adani Electricity bills, and Trainman, an online train booking platform
4. The bank recnelty enabled NRI customers to use their international mobile number to make UPI payments instantly in India, thereby significantly enhancing their convenience of making everyday payments. The Bank has made this service available through its mobile banking app, iMobile Pay. The Bank offers this facility across 10 countries namely USA, UK, UAE, Canada, Singapore, Australia, Hong Kong, Oman, Qatar and Saudi Arabia.
5. The Bank recently announced that its retail mobile banking app, iMobile Pay, has on-boarded over one crore customers of other banks. This significant achievement comes just over three years after ICICI Bank made the app open for customers of other banks.
6. Embassy of India has set up a digital fee collection kiosk at its premise in Kingdom of Bahrain in collaboration with ICICI Bank and SADAD Electronic Payment System BSC. The self-service touch-screen kiosk enables approx. 340,000 Indians residing in Bahrain and other service seekers to conveniently pay through debit and credit cards for various services including passport renewal, attestation, marriage registration and birth registration. ICICI Bank, as the banker in the arrangement will ensures seamless transfer of collected funds from SADAD to the Embassy digitally while SADAD is responsible for functioning of the kiosk.
7. ICICI Bank has also integrated its RuPay Credit Cards with UPI transactions, enhancing the payment convenience for its customers. With this integration, ICICI Bank customers can simply link their RuPay Credit Cards to UPI to carry out Person-to-Merchant (P2M) transactions online- such as shopping, payment of utility bills—and offline- such as payments at a POS (point of sale) machine-- in an effortless and secure manner. Further, they can earn reward points on their spends, improving their digital payment experience. The customers can link ICICI Bank Coral RuPay Credit Card, ICICI Bank HPCL Super Saver RuPay Credit Card and ICICI Bank Rubyx RuPay Credit Card to UPI.
8. ICICI Bank has announced that it has enabled millions of customers to pay to any merchant QR code by using the Bank’s digital rupee (e₹) app named ‘Digital Rupee by ICICI Bank’. The Bank has made it possible by making its digital rupee app UPI (Unified Payments Interface) interoperable. This integration empowers customers to scan existing UPI QR code at merchant outlets and pay via the digital rupee app. At the same time, it helps merchants to accept digital rupee payments on their existing UPI QR code, eliminating the need for mandatory on-boarding procedure.
9. ICICI Bank has set up a branch in the Domestic Tariff Area (DTA) in GIFT City, becoming the first private sector bank to commence operations in DTA. Housed at World Trade Centre (WTC) - GIFT City, the branch is also equipped with an ATM-cum-Cash Recycler Machine (CRM) to offer cash deposit and withdrawal services to customers. The Bank aims to serve the financial requirements of retail customers as well as institutions like schools, hospitals, companies and their employees living and operating in the DTA area of GIFT City.
10. It has recently launched ‘iFinance’, which enables crores of customers-retail and sole proprietors, to get a consolidated view of their savings and current accounts in one place. Customers of other banks can also get the benefit from this facility, which ICICI Bank has introduced by leveraging the Account Aggregator ecosystem, on the Bank’s digital platforms, namely iMobile Pay app, Retail Internet Banking (RIB), Corporate Internet Banking (CIB) and InstaBIZ, the Bank’s mobile app for businesses.
11. Recently the bank has enabled FASTag based payment for parking at Sardar Vallabhbhai Patel International Airport in Ahmedabad and Mangaluru International Airport. The facility allows FASTag users of any bank to pay the parking charges digitally and in a contactless manner, resulting in quicker movement of vehicles in the parking zone.
12. The bank also started offering Rupee Vostro Account to enable Indian exporters and importers to pay and settle export-import transactions in Indian Rupees (INR). The proposition reduces the foreign currency risk borne by Indian exporters and importers as they can use INR for invoicing, payment, and settlement of their transactions. This initiative is in line with India’s Foreign Trade Policy 2023 and RBI’s framework for invoicing, payment, and settlement of exports/imports in INR, in addition to US Dollar, Euro and other currencies. ICICI Bank has a wide array of over 100 Rupee Vostro Accounts of correspondent banks across 29 countries including USA, Canada, UAE, Saudi Arabia, UK, Germany, and Malaysia.
13. ICICI Bank has also announced a comprehensive bouquet of digital and physical solutions to cater to all banking needs of startups across their various life stages through its domestic and international network, and branch at GIFT City, Gujarat. The ‘Startup Ecosystem Banking’ proposition of the Bank offers treasury and transaction banking solutions, lending solutions, digital integrations, handling FDI and regulatory compliances, personal banking services for employees and founders.
14. ICICI Bank and BNP Paribas, a top European bank, have signed a Memorandum of Understanding (MoU) to cater to the banking requirements of European corporates operating in India and Indian companies in the European Union. The MoU establishes a framework of partnership between the two banks for providing financial services to corporate customers operating in the India – Europe corridor.
15. The bank has also launched of digital solutions for exporters, a comprehensive set of banking and value-added services on a single platform. In a first-of-its-kind initiative in the industry, the suite of solutions digitise the entire export life-cycle-- from discovery of export markets, export finance, foreign exchange services to receipt of export incentives.  The set of solutions also offer industry-first facilities such as instant disbursal of Export Packing Credit (Insta EPC) and Trade APIs.

In last 3 Years the stock gave a return of 77.05% as compared to the rise of Sensex and Nifty in the same period.

ICICI BANK is second largest private bank have very wide network across India as well as on global front. Its diversified portfolio of offerings places it ahead of many other private and public sector banks. Considering growth of Banking sector in upcoming years in India along with the growth of India’s various sectors in upcoming years, proven financial track record, digital banking penetration and growing strength of its subsidiaries, one can invest in this company with buy in dips strategy.

HET ZAVERI

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