ICICI Bank Long Term Buy Call

ICICI Bank Long Term Buy CallFairwealth Securities has maintained its buy rating on ICICI Bank with a price target of Rs 1230 in its report dated January 19, 2011.

At the current price of Rs. 1011, the stock of the bank is trading at just 19.37x and 14.91x times of the approximated FY11E & FY12E earning.

India's second biggest banking institution in term of profit, assets, advances, deposits, divisions said that its CASA deposits grew by 34.5% to Rs 98105 crore during September 2010 as against Rs 72930 crore during the same period of 2009, with CASA ratio remained at 44% during September last year as against 36.9% during September 2009.

As per RBI's rules on Basel ii norms, ICICI Bank's capital adequacy during September last year stood at 20.2% and Tier-I capital adequacy remained at 13.8. ICICI Bank's capital adequacy during March 2010 was 19.41% well above central bank's requirement.

As on August 19, 2010, ICICI Bank had a group of 2501 divisions and 5665 ATMs in the country.

The Bank of Rajasthan amalgamated with ICICI Bank with effect from August 12, 2010. At 2010 end, the Bank of Rajasthan possessed 463 arms and 127 ATMs, and its overall assets remained at Rs 17300 crore, total deposits stood at Rs 15060 crore and total advances were Rs 8330 crore.

ICICI Bank's net non performing assets came down by 30% to Rs 3192 crore during September 2010. The bank's net non performing share dropped to 1.37% as on September 2010. ICICI's provisioning coverage bank's ratio computed in line with the central bank guidelines during September 2010 was 69%.

The bank's PAT surged 18.8% to Rs 1236 crore for augmented Q2 FY11 as against 1040 crore for Q2 FY10. ICICI Bank's net interest income jumped 8.3% to Rs 2204 crore for the three month period ended September 2010.

Net Interest Margin (NIM) of the banking institution surged to 2.6% during the second quarter of 2011 as against 2.5% in Q2 of 2010.

ICICI Bank offers up a wide variety of products to their clients. Some of the products of the bank comprise insurance products, derivative products, fee and commission based products.

Bank's income insurance premium comprises net premium income, fee income and commission income.

The bank's deposits stood at 49.4% of the overall liabilities at the end of fiscal 2010 as against 54.2% to total liabilities at year end fiscal 2009.

ICICI Bank's domestic advances decline mainly because of the fall in retail advances that caused a decrease in funding needs.

Fairwealth anticipates that the bank's advances will surge by 20% in fiscal 2011 owing to the growing demand for infrastructure funding, particularly for the power project, telecommunication division, steel biz and oil & gas business.

The bank's deposits will go up by 18% in fiscal 2011 as the bank increased their deposits rate to defend their deposits base.