Bank Results Season: ICICI Bank (Q2 FY 2012) shows increased earnings capacity in limited potential

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The Topline at the bank hardly grew 10% over last year to INR 25.06 bln or hardly $500 mln and just INR 1 bln up or 4% from Q1 June 2011 of INR 24.11 bln

While Top line and hence Balance sheet size is almost the same ($45 bln @$1=Rs50) the bank has halved its Net NPas to 0.8x% from 1.06% to improve its standalone bottom line to $301 mln or Rs 1506 crores and Rs 1932 crores or almost $483 mln from is consolidated operations as retail wealth (mf and insurance ) improved performance. The bank does look at improving its NIM given the improvement in operating efficiencies but is grossly behind HDFC bank in credit growth esp as September saw Private and MNC banks making a killing in retail loans (Auto and unsecured/NBFC)

The stock is staying up even as FMCG major HUL also posts results and thus the bank will be the mainstay of the markets later when the press meet happens before market close

PAT is up 20% from September 2010 for the quarter for the bank

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PRESS MEET:

Bank has met 18% credit growth for the half year despite no growth in Q2 NIMs are safe as they will be determined from cost of funds

Its exposure of INR 36000 crores or $7.20 bln are safe and are being tracked. Coal is being procured from OMOs (7% of advances) No bad debts as for Indusind bank

As advances grow CASA will grow on priority with CASA now 42% the rest only based on demand of liabilities

Not moving away from retail . Both retail and corporate get equal focus but unsecured loans are attriting.

43% growth in cons profit has come mainly from Life insurance business

Provisions have fallen as unsecured legacy retail has completed provisioning and is a small portfolio