ICICI Bank extends fall on subprime worries

ICICI Bank declined 1.68% to Rs 955.25 at 9:55 IST on BSE on fresh selling despite the bank clarifying that it has no material direct or indirect exposure to US sub-prime credit.
The bank made this announcement after the market hours on Tuesday, 4 March 2008.
Meanwhile, BSE Sensex was down 60.24 points or 0.37% to 16,279.65.
On BSE, 8,715 shares were traded in the counter. The scrip had an average daily volume of 6.79 lakh shares in the past one quarter.
The stock hit a high of Rs 960 and a low of Rs 950 so far during the day. The stock had a 52-week high of Rs 1465 on 14 January 2008 and a 52-week low of Rs 791.15 on 3 April 2007.
India’s largest private sector bank by assets had underperformed the market over the past one month till 4 March 2008, declining 19.72% compared to the Sensex’s fall of 12.44%. It had outperformed the market in the past one quarter, declining 16.36% compared to Sensex’s decline of 17.22%.
The bank’s current equity is Rs 1112.62 crore. Face value per share is Rs 10.
The current price of Rs 955.25 discounts Q3 December 2007 annualized EPS of Rs 44.24 by a PE multiple of 21.59.
ICICI Bank clarified to media reports which stated that the bank has lost $ 264 million till 31 January 2008 due to subprime crisis. The bank said there will be no significant deterioration in actual credit quality of the underlying investment.
The bank said that due to widening of credit spreads in the international markets, it suffered negative mark-to-market impact on the credit derivatives and fixed income investment portfolios and overseas banking subsidiaries.
ICICI Bank and its overseas banking subsidiaries have an aggregate exposure of $2.2 billion in credit derivatives. As of 31 January 2008, the mark-to-market negative on this portfolio due to movement of credit spreads was about $155 million of which $88 million had been provided for in the financial statements of the bank and its subsidiaries for the nine months ended 31 December 2007.
ICICI Bank and its overseas banking subsidiaries have fixed income investment portfolios, which have a mark-to-market negative due to widening of credit spreads. As of 31 January 2008 this negative was about $108 million of which $101 million had been accounted for in the financial statements as of 31 December 2007.
ICICI Bank’s net profit rose 35.2% to Rs 1230.21 crore on 36.4% rise in operating income to Rs 10338.36 crore in Q3 December 2007 over Q3 December 2006.
ICICI bank’s principal activity is to provide retail-banking, corporate banking, cash management and treasury management services.