>ICICI BANK: Return to growth; Buy

■ Management meeting re-affirms our positive stance; Buy We hosted Ms. Chanda Kochhar, MD & CEO of ICICI Bk, in Hong Kong over the last two days. The bank has successfully delivered on the 4Cs strategy and is now seeking to leverage capital for growth. We believe the “return to growth” from 2HFY10 and a sustained focus on costs and profitability could see ROA expanding from <1.1%>

■ Key highlights from mgmt. meetings
A) While domestic loan growth for ICICI Bk should be at par with sector growth (20%), overseas growth is at +8-9%, vs. flat for FY11. Domestic loan growth may exceed sector loan growth in FY12, as pricing power emerges.

B) CASA to sustain at +40% vs. +34-35%, driven by recently added distribution.

C) Margins will definitely be stable, with an upward bias driven by rising share of deposits, higher share of CASA and rising overseas spreads.

D) NPL accretion to be low; minimal re-lapse on restructuring expected.

■ Better positioned for growth; est. +30% in FY11-12
We have tweaked our earnings by <1-3%>

To read the full report: ICICI BANK