ICICI Bank continues to deliver an exemplary performance, rising above all sectoral challenges, as it sustains RoA in the range of 2.3-2.4%, which is even beyond the aspirational level for most banks.
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Motilal Oswal Report
ICICI Bank Ltd. reported another commendable quarter, wherein the bank saw healthy net interest margins, lower provisions, controlled slippages and contained opex.
Its focus on the betteryielding assets has helped the bank to have fair control over NIM compression, with next quarter expected to have the benefit of CRR cuts and cost of fund repricing.
ICICI Bank's investment in technology has resulted in consistent productivity gains, along with market share gains and steady improvement in cost ratios.
Asset quality remains under control, while ECL impact is expected to be fairly manageable for the bank. The bank continues to carry a contingency provisioning buffer of Rs 131 billion (0.9% of loans).
We maintain our earnings estimates and expect FY27E RoA/RoE of 2.3%/17.0%. ICICI Bank remains our preferred Buy in the sector with a revised target price of Rs 1,700 (2.8x FY27E adjusted book value).
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