ICICI Bank Q4 Results Review - Credit Growth Slowdown; NIMs Stable QoQ: IDBI Capital

IDBI Capital Report

ICICI Bank Ltd. reported slowdown in credit growth led by lower growth in corporate book while deposit growth improved led by strong term deposits. We expect 15% compound annual growth rate (FY24-26E) loan growth.

Net interest margins declined slightly by 3 bps QoQ to 4.4% led by re-pricing of deposits. Further, management guided NIMs to be range bound from here on for the next few quarters until a rate cut.

Asset quality improved led by lower slippages. Bank reported strong profitability growth at 17% YoY led by decline in provisions. Pre-provision operating profit grew by 9% YoY led by lower net interest income growth (up 8% YoY).

Lower credit costs led by better recoveries resulted in best return ratios in last few years; return on asset at 2.3%.

We have maintained estimates and ‘Buy’ rating with a new target price of Rs 1,375 (Rs 1,350), valuing parent business at Rs 1,192 at 2.6 times price/adjusted book value FY26E and rest for the subsidiaries.

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