ICICI Bank pips SBI in m-cap race, becomes second-most valuable Indian bank

ICICI Bank, the country’s largest private sector lender in terms of assets, on Thursday surpassed India’s largest lender State Bank of India (SBI) in terms of market capitalisation (m-cap) to become the sixth-most valued stock on the Bombay Stock Exchange (BSE). At Thursday’s closing price, ICICI Bank had m-cap of ₹4,83,680 crore, while SBI was valued at ₹4,12,718 crore. With this, ICICI Bank has became the second-most valuable Indian bank in terms of market capitalisation, after HDFC Bank whose valuation stood at ₹7,23,386 crore as of May 12, 2022.

In the BSE’ top five list, billionaire Mukesh Ambani-led Reliance topped the chart with a market cap of ₹16,24,236 crore, followed by Tata Consultancy Services (₹12,48,102 crore), HDFC Bank (₹7,23,386 crore), Infosys (₹6,34,915 crore), Hindustan Unilever (₹5,03,047 crore).

Established in 1994, ICICI Bank is the largest private sector bank in India in terms of assets and the second largest in terms of assets and market capitalisation. The bank stock has disappointing performance in calendar year 2022, with its share price falling 6% on year-to-date (YTD) and 9% in the past one month. The stock has given 16.5% returns to its shareholders over one year period, 84% in three years, and 157% in five years.

In comparision, SBI, the country’s largest and oldest bank, saw its shares falling 10% in a month, while it rose 1% on YTD basis. SBI share price has delivered 26% return in one year, 51% in three years, and 56% over a five years period.

ICICI Bank closed the financial year 2021-22 on a robust note, driven by higher net interest income and a decline in provisions. The bank’s board also declared a dividend of ₹5 per share for the financial year ended March 31, 2022.

For the January-March quarter of 2022, the bank reported a 59.4% jump in its net profit to ₹7,018.7 crore, from ₹4,403 crore in the year-ago period. The net interest income (NII) rose 21% year-on-year (YoY) to ₹12,605 crore in the March quarter of 2022, while the net interest margin improved to 4% as against 3.84% in Q4 FY21. During the quarter under review, the non-interest income, excluding treasury income, surged 11% YoY to ₹4,608 crore, while fee income jumped 14% YoY to ₹4,366 crore in Q4 FY22.

On the asset quality front, the net non-performing assets dipped 24% YoY and 5% sequentially to ₹6,961 crore as of March 31, 2022. The net NPA ratio fell to 0.76% on March 31, 2022, from 1.14% in the year-ago period.

Post Q4 results, global brokerage firm Credit Suisse has maintained an “outperform” rating on ICICI Bank stock, with a revised target price of ₹870. The brokerage firm lauded the lender’s strong growth and profitability in Q4FY22 and expects the lender to deliver stellar earnings in the coming quarters.

Goldman Sachs has also affirmed “buy” rating with an upgraded target price of ₹938, while domestic brokerage YES Securities has recommended a “buy” rating, with a revised target price of ₹1,043.

On Friday, ICICI Bank shares were trading marginally lower at ₹693.65 apiece on the BSE, while SBI shares rose 0.9% to ₹466.70 on the BSE. SBI is scheduled to release its fourth quarter and year ended results today.