Monday, October 27, 2008

ICICI Bank (IBN) reports decent quarter

How good is this Indian bank that they reported stronger results YOY even though they had nearly $300M more in loan provisions. The ability to lower expenses so drastically even though they grew deposits and loans speaks to the efficiency of this bank.


-- Profit after tax of US $216M; 39% increase over first quarter

-- 42% year-on-year increase in core operating profit (excludes the huge swings in treasury income)

-- 12% year-on-year reduction in costs due to cost rationalization measures

-- Capital adequacy of 14.01%

-- CASA ratio increased to 30% from 25% a year ago

IBN continues to launch both domestic and international growth where they can utilize non-resident Indians as customers and a low cost structure in India to run these international operations at lower costs.

  • At October 22, 2008, the Bank had 1,400 branches and 4,530 ATMs. (State Bank of India has 10,000 branches)
  • Current and savings account deposits increased 16% to Rs. 66,914 crore (US$ 14.2 billion) at September 30, 2008 from Rs. 57,827 crore (US$ 12.3 billion) at September 30, 2007.
  • Being the preferred bank for non-resident Indians: The Banks remittance volumes increased by 38.2% in Q2-2009 to about Rs. 11,946 crore (US$ 2.5 billion) compared to Q2-2008.
Not sure what isn't to like about the future of this Indian bank. India is still in the early stages of a infrastructure build out plan and banks will be big beneficiary of such a move. Any doubts this progressive bank in India will be substantially larger 10 years from now? Don't think so, but then why is the stock down to $12 from a high of $74? Based on the stock price, I sure thought this would be a horror report instead of one filled with lots of growth.

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