Here Are The Key Highlights From ICICI Bank’s First Analyst Meet In A Decade

ICICI Bank Ltd. aims to focus on digital lending as it plans to build its retail bank and reduced concentration in corporate books.

The private lender, in its first analyst meet after a decade, said it would also focus on return on equity and improving pre-provisioning operating profit.

Here are the key highlights from the analyst meet…

• Focus on profitable growth and partnership model.
• Bank is engaging with various startups to provide improved customer proposition, penetrate into newer markets and reduce operating costs across product segments.
• De-risked corporate asset book; focus remains on growing core pre-provisioning operating profit.
• Has increased granular income streams across businesses.
• Maintained ROE guidance of 15 percent by June 2020.
• Use of technology to reduce costs was the key theme.
• Expects recent judgment to enable faster resolution of NCLT cases.

Retail business strategy

The bank continues to focus on:

• Opportunities in the retail segment by offering solutions to help build long-term relationships.
• Rising share of instant loans which is helping in cutting costs.
• Digital now makes up 53 percent of personal loans originations against 5 percent in FY18.

Corporate banking strategy

• Bank has reduced concentration and improved quality of origination loans.
• Corporates are moving towards banks offering comprehensive solutions.
• Targeting the entire value chain (of employees, customers, etc.) to enhance profitability.
• Bank is seeking non-credit business at the time of asset origination.

Analysts view

Brokerages such as UBS, Morgan Stanley, Nomura, Emkay Global and Motilal Oswal have raised the target price for ICICI Bank after the analyst meet.

• UBS maintains a ‘buy’ rating and raised the target price to Rs 620 apiece from Rs 570 a share.
• Nomura maintains ‘buy’ rating on the stock and raised the target price to Rs 645 apiece from Rs 610.
• Morgan Stanley said ICICI Bank will become a “compounding machine”. It has a target of Rs 775 a share with an ‘overweight’ rating.
• Emkay has a ‘buy’ rating on the stock and has a target price to Rs 650 apiece.
• Motilal Oswal has set a target price of Rs 625 apiece.