ICICI Bank stock update: Credit Suisse maintains Buy, check details

Ahead of the Jan-Mar 22 quarterly earnings, global brokerage firm Credit Suisse has retained its bullish outlook on ICICI Bank. Here are the major highlights:

Credit Suisse on ICICI Bank

• The global brokerage firm believes that ICICI Bank will be able to maintain its Growth as well as Asset Quality metric in the upcoming quarters. In the Oct- Dec 21 period, ICICI Bank had reported a 23% on-year rise in Net Interest Income to Rs 12,236 crore compared to Rs 9,912 crore reported in the same period last year. Sequentially, net interest income was up by 4.8%. 
• The asset quality of ICICI Bank had improved in the last quarter. The net NPA ratio declined to 0.85% in Q3FY22 from 0.99% in Q2FY22.
• Credit Suisse noted that the growth in Net Interest Margin may take a pause. The bank had reported a net interest margin of 3.96% in Q3FY22 compared with 4% in Q2FY22. 
• Credit Suisse noted that ICICI Bank is seeing a high growth in Opex, driven by technology investments. The global firm has also noted that the bank remains adequately capitalised. ICICI reported Capital Adequacy at 19.79% in the December quarter and Tier-1 capital adequacy at 18.81% as compared to the minimum regulatory requirements of 11.7% and 9.7% respectively.
• The research firm expects credit cost moderation to sustain and the RoE to improve to 15%. 
• Credit Suisse has retained a ‘Buy’ rating on the stock with a target price of Rs 850. 

ICICI Bank Outlook

ICICI Bank had reported a strong set of numbers for the Oct-Dec 21 quarter beating street estimates. The deposits as well as the loan book saw a sequential increase. The gross and net NPAs also reduced sequentially. 

Going forward, the bank remains confident about its healthy asset quality position. The bank could continue to see robust growth in the upcoming quarters due to good traction in its mortgage, unsecured and SME segments. Rising rates will also benefit margins eventually. The upcoming quarterly results in April will be a key event to be monitored.