ICICI Bank Share Price

ICICI Bank Limited Fundamental Analysis

This article aims to examine ICICI Bank Limited through understanding its business model and industry fundamentals that could help as an investment for you.

ICICI Bank Limited

ICICI Bank Limited is an Indian multinational bank and financial services firm, which has its headquarters in Mumbai while having a registered office at Vadodara. It was formerly known as The Industrial Credit and Investment Corporation of India.

The bank provides corporate and retail customers with a variety of banking and financial services through different delivery channels and specialized subsidiaries operating in the fields of investment banking, life insurance and non-life insurance, venture capital and asset management.

ICICI has a network of 6,000 branches and 17,000 ATMs all over India and is present in 17 other countries. The bank’s subsidiaries are located in the United Kingdom and Canada while its branches can be found in the United States, Singapore, Bahrain, Hong Kong, Qatar, Oman, Dubai International Finance Centre (DIFC), China, and South Africa. Additionally, there are representative offices in the United Arab Emirates (UAE), Bangladesh, Malaysia as well as Indonesia.

The Reserve Bank of India (RBI) has identified ICICI Bank as a Domestic Systemically Important Bank (D-SIB), often referred to as a bank that is “too big to fail”.

Is the Banking Sector a Goldmine Investment?

The banking sector in India is poised for significant growth and transformation, making it a potentially good investment option. The sector is expected to witness a significant increase in revenue, with the projected revenue estimated to reach US$15.14 billion in 2024.

Multiple disruptive forces are reshaping the foundational architecture of the banking and capital markets industry, including higher interest rates, reduced money supply, more assertive regulations, climate change, and geopolitical tensions. The exponential pace of new technologies is influencing how banks operate and serve customer needs.

Given these factors, ICICI Bank Limited could be a good choice for investment in the banking sector in India. It has shown strong performance and has a solid investor relations program.

Who are ICICI Bank Limited competitors in the Banking Sector?

Some of ICICI Bank Limited’s key competitors in the banking sector are as follows:

• State Bank of India (SBI)
• HDFC Bank
• Axis Bank
• Kotak Mahindra Bank
• IndusInd Bank

History of ICICI Bank Limited

Here’s an overview of the development of ICICI Bank Limited, one of India’s largest private-sector banks that has had a rich history spanning several decades:

• Incorporation: ICICI Bank was incorporated in 1994 as a part of the ICICI group. It was originally promoted by ICICI Limited, an Indian financial institution. The bank was established as the Industrial Credit and Investment Corporation of India Bank before it changed its name to ICICI Bank.
• Product Range: ICICI Bank offers a wide range of banking products and financial services. This includes savings accounts, Fixed Deposits (FDs), Recurring Deposits (RDs), car loans, two-wheeler loans, home loans, credit cards, and personal loans. They also offer services in areas like investment banking, life and non-life insurance, venture capital, and asset management.
• Infrastructure: ICICI Bank has a network of 5,900 branches and 16,650 ATMs/cash recycling machines across India. It also has a presence in 17 countries.
• Certifications: ICICI Bank has prepared a certificate (USA Patriot Act Certificate) for use by any financial institution that requires such certification from ICICI Bank Limited or its overseas branches.
• Awards and Recognition: ICICI Bank has received numerous awards and recognitions. Some of them include ‘Company of the Year’ at The Economic Times Awards for Corporate Excellence 2022, ‘Best Bank’ at the 16th Mint BFSI Summit and Awards, and ‘Best Company to Work For in India’ in the BFSI sector as per a survey conducted by Business Today magazine.

Company Profile of ICICI Limited

Pros:

• Digitization Efforts: ICICI Bank has made significant strides in enhancing digital banking services for both retail and corporate clients. The growing adoption of its mobile banking app, iMobile Pay, is boosting its market share.
• Earnings Growth: Over the past three to five years, the company experienced a remarkable 60.3% growth in earnings per share (EPS), far surpassing the industry average of 5.8%. This positive trend is anticipated to persist in the foreseeable future.
• Revenue Strength & High Domestic Loan Dependence: ICICI Bank’s non-interest income, which is a key component of its revenues, increased 12% in the first three months of fiscal 2024.

Cons:

• Higher Brokerage Fees: Compared to discount brokers, ICICI Direct charges higher brokerage fees, with a minimum charge per trade and a flat fee for specific stocks.
• Account Maintenance Charges: ICICI Direct levies high annual maintenance charges for accounts.
• High Debt: As of 2024, ICICI Bank has a high debt of INR 2,07,427.99 Crore. This can be a potential risk factor for investors.
• Net Interest Margin: The net interest margin was 4.40% in Q4-2024 compared to 4.43% in Q3-2024 and 4.90% in Q4-2023. This indicates a slight decrease in the net interest margin, which could impact the bank’s profitability.

The Finances

Here’s a summary of ICICI Bank Limited’s financial information as of June 2024:

Shareholding pattern of ICICI Bank Limited

Here’s a concise summary of Asian Paints Limited’s shareholding pattern as of June 2024 :

• Promoters: Hold 0%
• Foreign Institutional Investors (FII): 44.8%
• Domestic Institutional Investors (DII): 45.6%
• Public: 9.6%

Peer Multiple Comparison

Let us compare ICICI Bank Ltd with its peers that have full data available. See the table below: