ICICI Bank reported a robust quarter with higher-than-expected net interest margin (-5 bps ex of one-offs), elevated treasury gains and strong dividend income aiding a PAT beat. Asset quality metrics continued to show strength, with ~50 bps of credit costs and contained slippages at 1.9%. Loan growth at 2% QoQ was driven by SME (+4%) and home loan (+2%).
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Dolat Capital Report
ICICI Bank Ltd. is best placed across key metrics including cost of fund, advances growth, profitability ratios (return on asset/return on equity), capital comfort, and provision buffers amongst large private banks, driving its valuation premium to peers.
It has the highest RoE amongst large private banks and no immediate capital requirement. Also, industry-leading contingent buffers at ~90 bps of advances provide comfort.
We value the standalone bank at 3x FY27E against RoA/RoE of 2.1%/15%.
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