ICICI Bank’s Q4FY13 Results See A Drop In Its Share Price

India's biggest private lender ICICI Bank saw its share price dropping by 2.82% in today's trade (April 26, 2013) despite its net interest income (NII) increasing by 22.5% to Rs 3803 crore on a standalone basis for Q4FY13, largely meeting the street estimates. On a consolidated basis too, the NII has increased by 22% to Rs 4526 crore for the quarter ending March 31, 2012.

The net profit of the bank, on a consolidated basis, has increased by 38% on a yearly basis to Rs 2492 crore. Such an increase in the profit was largely backed by the improvement in the profit from general insurance business that increased by 106%. The general insurance business of the bank posted a profit of Rs 32.56 crore against a loss of 591.81 crore in the same quarter last year. The retail and treasury division of the bank saw a growth of 30% and 34% respectively in the same period. However, the corporate banking division saw a drop in profit by 7% to Rs 1620.48 crore. 

However, on the revenue front, the bank’s corporate banking division saw a yearly increase of 7% to Rs 7866 crore. The retail, treasury and general insurance division saw their revenues increasing by 12%, 10% and 11% respectively. The life insurance business, however, saw a decline in its revenues by 5% in the same period. 

The asset quality of the bank has been a mixed bag. While the gross NPA has declined to 3.22% in Q4FY13 from 3.62% in Q4FY12, the net NPA has increased to 0.77% from 0.73% in the same period. The provisions (other than tax) have increased by 50% to Rs 547 crore for Q4FY13.

The capital adequacy ratio of the bank has declined on a sequential basis but has improved on a yearly basis to 18.74%.

The bank's current and savings account (CASA) improved to 38.1% during Q4-2013 compared to 37.4% during the quarter ended December 31, 2012.

The board of the bank has also proposed a dividend of Rs 20 per share that gives a dividend yield of 1.74% at the current market price. A share of the bank is currently trading at a price to book value of around 2x, which looks attractive and considering the growth in the business of the bank and the healthy return on assets (ROA), one can use such a drop in share price to enter the stock.