ICICI BANK 2021-22 Annual Report Analysis

Thu, 31 Mar

ICICI BANK has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the bank during the year 2021-22.

ICICI BANK Income Statement Analysis

• Interest income during the year rose 7.0% on a year-on-year (YoY) basis.
• Interest expenses were down by 3.5% YoY during the same period.
• Operating expenses declined by 4.1% YoY during the year.
• The bank's net interest income (NII) increased by 16.6% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a growth and stood at 3.6% in FY22 as against 3.5% in FY21.
• Other income declined by 13.7% YoY during the year.
• Net profit for the year increased by 36.6% YoY.
• Net profit margins during the year increased to 26.3% in FY22 from 20.6% in FY21.

ICICI BANK Income Statement – 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Interest Income	Rs m	891,627	954,069	7.0%
Other Income	Rs m	720,295	621,295	-13.7%
Interest Expense	Rs m	426,591	411,667	-3.5%
Net Interest Income	Rs m	465,036	542,402	16.6%
Operating Expense	Rs m	762,717	731,517	-4.1%
Pre-provision Operating Profit	Rs m	422,614	432,179	2.3%
Provisions & Contingencies	Rs m	220,418	174,341	-20.9%
Profit before tax	Rs m	258,841	342,413	32.3%
Tax	Rs m	56,644	84,574	49.3%
Profit after tax	Rs m	183,843	251,101	36.6%
Minority Interest	Rs m	-19,796	-14,282	27.9%
Net Interest Margin	%	3.5	3.6
Net profit margin	%	20.6	26.3

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ICICI BANK Balance Sheet Analysis

• The bank's deposits during FY22 stood at Rs 10,913.7 bn as compared to Rs 9,599.4 bn in FY21, thereby witnessing an increase of 13.7%.
• Advances for the year stood at Rs 9,203.1 bn as compared to Rs 7,918.0 bn during FY21, a rise of 16.2%.
• Cost of deposits for ICICI BANK fell 12.3% and stood at 3.1%, while yield on advances fell to 7.3%.
• The lender's investments rose to Rs 5,671.0 bn during the year from Rs 5,365.8 bn in FY21.
• Borrowing stood at Rs 1,616.0 bn, a growth of 12.3% as compared to previous year.
• Overall, the total assets and liabilities for FY22 stood at Rs 17,526.4 bn as against Rs 15,738.1 bn during FY21, thereby witnessing a rise of 11.4%.

ICICI BANK Balance Sheet – as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	1,575,844	1,817,861	15.4%
Advances	Rs m	7,918,014	9,203,081	16.2%
Deposits	Rs m	9,599,400	10,913,658	13.7%
Yield on advances	%	7.6	7.3
Cost of Deposits	%	3.5	3.1
Investments	Rs m	5,365,786	5,670,977	5.7%
Borrowings	Rs m	1,438,999	1,616,027	12.3%
Total Assets	Rs m	15,738,122	17,526,374	11.4%

Current Valuations for ICICI BANK

• The trailing twelve-month earnings per share (EPS) of the bank stands at Rs 36.1, an improvement from the EPS of Rs 26.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 868.8, stands at 19.2 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 3.3 times, while the price to income ratio stands at 5.1 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Income per share (Unadj.)	Rs	128.9	137.3
Earnings per share (Unadj.)	Rs	26.6	36.1
Diluted earnings per share	Rs	26.3	36.0
Avg P/E ratio	Rs	18.1	19.2
Avg P/ABV ratio	Rs	3.0	3.3
Avg Market Cap	Rs	3,322,789	4,831,828
Dividends per share (Unadj.)	Rs	2.00	5.00

Ratio Analysis for ICICI BANK

• Efficiency Ratios

  Credit/Deposit Ratio: The bank's credit/deposit ratio improved and stood at 84.3x during FY22, from 82.5x during FY21. The credit/deposit ratio tells us how much money a bank has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The bank's debt to equity ratio decreased and stood at 6.89x during FY22, from 7.00x during FY21. The debt to equity ratio of a bank tells us how much debt a bank uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): ICICI BANK's capital adequacy ratio (CAR) was at 19.2% as on 31 March 2022 as compared to 19.1% a year ago. This ratio helps measure the financial strength of the bank or any finance company to meet their obligations using their assets and capital.

  A bank that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the bank's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a bank sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the bank is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that banks hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the bank improved and stood at 13.8% during FY22, from 11.7% during FY21. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the bank improved and stood at 1.43% during FY22, from 1.17% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the bank improved and stood at 12.96% during FY22, from 10.91% during FY21. The ROCE measures the ability of a bank to generate profits from its total capital (shareholder capital plus debt capital) employed in the bank.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a bank's gross NPAs to gross advances. ICICI BANK's gross NPA ratio stood at 3.8% as of 31 March 2022 compared to 5.3% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a bank's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the bank has made provisions.

  The net NPA ratio of ICICI BANK was 0.8% in financial year 2022. This compared with 1.2% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Credit/Deposit Ratio	x	82.5	84.3
Debt to Equity Ratio	x	7.0	6.9
Loans / Deposits	x	0.1	0.1
Capital Adequacy Ratio	%	19.1	19.2
Return on Equity	%	11.7	13.8
Return on Assets	%	1.2	1.4
Return on Capital Employed	%	10.9	13.0
% of Gross NPAs	%	5.3	3.8
% of Net NPAs	%	1.2	0.8
Yield on Advances	x	7.6	7.3
Yield on Investments	x	5.9	4.3

To see how ICICI BANK has performed over the last 5 years, please visit here.

ICICI BANK Share Price Performance

Over the last one year, ICICI BANK share price has moved up from Rs 688.2 to Rs 868.8, registering a gain of Rs 180.6 or around 26.2%.

Meanwhile, the S&P BSE BANKEX is trading at 46,701.0 (up 2.1%). Over the last one year it has moved up from 39,542.9 to 46,701.0, registering a gain of 7,158.2 points (up 18.1%).

Overall, the S&P BSE SENSEX is up 7.8% over the year.

(To know more, you can check out historical annual results for ICICI BANK here and quarterly results for ICICI BANK here)

Read: Latest Annual Report Analysis of ICICI BANK