ICICI Bank Feeling The Chill

ICICI Bank Limited (IBN) is India’s second-largest bank and largest private bank, with total assets of about Rs3,998 billion (US$100 billion) at March 31, 2008. ICICI Bank had a network of over 1,308 branches and extension counters and 3,950 ATMs at fiscal year-end 2008.

We are maintaining our Hold recommendation on ICICI, as well as our $18 target price. ICICI reported 2009 fiscal second quarter (September 30) earnings up 1% year over year to Rs10.14 billion, below our estimate, as non-interest income growth slumped 9% on a large decline in other income and loss provisions jumped 43%.

We are cutting our fiscal year (March 31) EPADS estimates to $1.50 from $1.80 for 2009 and to $1.65 from $2.25 for 2010. The reductions reflect the second quarter shortfall and changes in foreign currency assumptions due to recent US$ appreciation against the Indian Rupee, as well as lower revenue growth and higher loss provisions related to economic slowing in India. The annual dividend was increased 10%.

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