ICICI Bank is India’s second largest bank and largest private sector bank, with total assets of Rs. 5367.95 billion as on March 31, 2013. It mainly operates in Retail Banking, Wholesale Banking and Treasury. It has a large customer base of around 24 million. The bank has a presence in 19 countries, including India.

1. ICICI Bank Research Report
COMPANY PULSE: A Research Report of ICICI Bank
The Company Pulse is a no-nonsense decision enabling report
which gives the details of the company, 10 Year X-Ray analysis,
the company’s future prospects.
The Company Pulse is extremely useful information which you
need to read before investing in a particular stock. There is no
need to go through a large number of pages & data to know
the past & future potential of the company. Just reading the
Company Pulse will suffice.
Report Date: 08 Aug 2013
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10 YEAR X-RAY of ICICI Bank : Analysis of Financial Track Record
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ICICI Bank Latest News, Price Chart of ICICI Bank

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About ICICI Bank:
ICICI Bank is India’s second largest bank and largest private sector bank, with total
assets of Rs. 5367.95 billion as on March 31, 2013. It mainly operates in Retail
Banking, Wholesale Banking and Treasury. It has a large customer base of around
24 million. The bank has a presence in 19 countries, including India. Ithas
subsidiaries in UK, Russia and Canada, branches in US, Singapore, Bahrain, Hong
Kong, Sri Lanka, Qatar and Dubai International Finance Centre and representative
offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand,
Malaysia and Indonesia. Its UK subsidiary has established branches in Belgium and
Germany.
Revenue Segregation (FY13)
ICICI Bank also offers wide range of financial services to corporate and retail
customers through its specialized subsidiaries in the areas of investment banking,
life and non-life insurance, venture capital and asset management.

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10 YEAR X-RAY Analysis of ICICI Bank:
ICICI Bank, in the last 10 years, increased its net interest income by 29.17% on a
stand-alone basis, from Rs. 2185 Cr. in FY04 to Rs. 13866 Cr. in FY13. On a
consolidated basis, its net interest income was Rs. 16599.18 Cr. in FY13. Its CASA
ratio was below 30% till FY09; but in the last two financial years, it boosted its CASA
ratio was 43.5% at March 31, 2012, which is quite remarkable. The bank earned net
interest margins of 3.11% in FY13. Its book value per share grew only by 10.71% in
FY12. The book value of the bank increased from Rs. 125.28 in FY04 to Rs. 578 in
FY13. ICICI Bank acquired Bank of Rajasthan in 2010.
ICICI Bank managed to attain ROE (Return on Equity) of 13.62% in FY12. The net
non-performing assets to net advances ratio of the bank have been continuously
above 1% in the last five years, which shows its asset quality is not up to the mark. If
we look at its trend, it is showing decreasing net non-performing assets to net
advances ratio in the last two years, from 1.11% in FY11 to 0.73% in FY12. This
shows it is continuously improving its asset quality with a large focus on it.
At the end of FY13, its capital adequacy ratio was at 18.74%; much higher than the
RBI guideline of 9%, which will help the bank grow its operation comfortably.
Considering all the above factors we can say that the 10 YEAR X-RAY of ICICI Bank
is Orange (‘somewhat good’).

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LONG-TERM PROSPECTS:
Introduction of Basel III norms: The latest norm now seeks to improve the
banking sector's ability to deal with financial and economic stress, improve
risk management and strengthen the banks' transparency.
The minimum requirement for common equity has been raised under Basel III from
2% to 4.5% of total risk-weighted assets. The overall Tier 1 capital requirement will
also increase from the current minimum of 4% to 6%. The required total capital will
increase to 10.5% when combined with the conservation buffer.
It will be a challenging task for banks, especially public sector banks to meet the
minimum capital requirement according to new norms.
Pressure on Return on Equity: To meet the new norms, apart from government
support a significant number of banks have to raise capital from the market. This will
push the interest rate up, and in turn, cost of capital will rise while return on equity
(RoE) will come down. To compensate the RoE loss, banks may increase their
lending rates. However, this will adversely affect the effective demand for loan and,
thereby, interest income.
Also, the government's large fiscal deficit will limit its ability to inject capital into
government-owned banks, which currently have less capital adequacy than the
private and foreign banks operating in India.
Pressure on Yield on Assets: On account of higher deployment of funds in liquid
assets that give comparatively lower returns, banks' yield on assets, and thereby
their profit margins, may be under pressure.
A few of the smaller banks could become potential takeover targets, which could
result in consolidation in India's currently fragmented banking sector
Another major event which could impact banking industry is the passing of
Banking laws (Amendment) Bill on 20th December 2012.The Bill would pave the
way for new bank licenses by RBI resulting in opening of new banks and branches.
NBFCs like PFC, L&T finance, Shriram group well as some corporate groups
Reliance, Tata etc) have applied for the banking licenses
New Entrants in the market may result in price based competition on deposits, loans
and human resources. Entry of New banks, with the issuance of banking licenses
has sparked the hope for M&A.
In order to achieve a rapid growth, new banks may target smaller private banks with
larger distribution. The potential targets may be Federal Bank, Karur Bank,
Dhanalaxmi Bank, LakshmiVilas Bank.

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Another proposal to increase voting rights from 10% to 26% for the investors
in Private Banks not only increases FIIs interest but also gives them better say
in the management decisions.
During 2011-12 Indian Banking Industry faced major challenges regarding asset
quality deterioration with banks’ gross non performing asset showing a sharp
increase in sectors such as aviation, infrastructure and power. In 2012-13, Banks
started focusing on lending to more profitable sectors such as SME which displays
better risk management and effective monitoring.
Strategic Path of ICICI Bank
With a market share of 4.2% in the domestic loans and largest branch network in the
private financials, above industry growth and favorable margins will drive earnings.
Cut down on unsecured retail loans
To build a healthy loan portfolio and resolve asset quality issues, ICICI Bank
reworked its strategy by running down unsecured retail loan portfolio in favor of low-
risk secured loans and corporate loans. In fiscal 2012, there was an increase in retail
lending volumes in secured retail products. In FY 2012, total retail portfolio grew by
7.1% and secured retail portfolio grew by 9.4%.
In future, ICICI Bank has plans to grow its unsecured loan but in a measured way.
Also, bank restricted new exposures to the segment on which it has outstanding
loans and focused on those industrial segments which are showing growth
opportunities.
One of the major concerns for ICICI is that it has one of the most
concentrated loan books. ICICI’s exposure to its top 20 borrowers is quite

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large. This accounts for large corporate credit risk. Also it has limited
exposure to SME.
Impact of Basel III norms on ICICI Bank:
The norm forbids banks from using the consolidated capital of any insurance
or non-financial subsidiaries for calculating capital adequacy.
Repatriation of capital from international subsidiaries will reduce capital
charge ensuring dilution-free growth.
Once capital is brought back into the parent company, it shall not only
translate to higher RoEs for international subsidiaries but also provide cushion
to parent capitalization.
Stringent norms for capital deductions will have some impact on reported
capital levels for ICICI bank (given large proportion of investment in
subsidiaries) but the impact on tier-1 for ICICI is manageable.
International subsidiaries are adequately capitalized. Capital adequacy ratios
for ICICI UK and ICICI Canada improved from 17.3% and 23.4% in FY10 to
33.6% and 34.1% in 2QFY13.
Technological Advancement
ICICI Bank has been at the forefront of technological innovations in banking. With
Vodafone, ICICI launched “M-Pesa” in March’13, aunique service to transfer money
and make payments via mobile phone. The Bank now offers a unique and innovative
service that provides basic banking facilities to millions of Indians who still depend on
informal channels for their banking needs.ICICI took much such initiative such as
“Mobile Money”, “iWish”, “Instanetexpress” etc, which shows consistent innovation in
technology. Technological developments facilitate the flow ofInformation, leading to
reduced cost, better customer satisfaction and faster decision-making.
Focus on SME
The other key drivers for growth are SME and CV loans. ICICI Bank along with IFC
and IBM launched SME toolkit an online resource centre in 2007.It is a free online
resource centre that contains up-to-date information and tools to enable SMEs in
emerging markets learn how to increase their productivity, efficiency and capacity, as
well as improve their access to capital and new markets.

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Conclusion:
On the whole, the 10 YEAR X-RAY of ICICI Bank appears to be Orange (somewhat
good).
Long-term future prospects of ICICI Bank will be Green (Very Good)
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