ICICI Bank has doubled its net profits in the 1QFY01 led by an improvement in its interest spread. During the current quarter the bank reshuffled the composition of its deposits by gradually liquidating higher cost deposits. This has resulted in increase in its operating margins to 30.1% (from 19.1% in 1QFY00).
The bank's non performing assets to advances ratio is 1.2% and capital adequacy ratio stood at 19.2%. Its deposits base increased by 47% to Rs 87 bn and advances witnessed a jump of 56% to Rs 54 bn. The retail deposits of the bank constituted 42% of its total deposits.
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During the quarter the bank expanded its distribution network by opening 4 branches and installing 33 additional ATMs. It has largest network of ATMs (208) in the country spread across 49 centres in 17 states. The network is complemented by other technology driven channels such as web-enabled kiosks, call centres, mobile phones and the Internet. The number of Internet banking customers increased to over 155,000 from 110,000 in the corresponding previous quarter.
At the current market price of RS 197, ICICI Bank is trading at 24 times its 1QFY01 annualised earnings. Its Price/Book value ratio of 3 times compares well with other private sector banks. However compared to HDFC Bank its valuations are lower due to concern over quality of its assets and lower operating margins. The valuations are likely to improve in the future keeping in mind the bank's initiative to reduce its NPA ratio. Further the bank's emphasis on technology will help it in maintaining its financial growth.
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