ICICI Bank extends gains for the 5th day

ICICI Bank rose 3.35% to Rs 335 on 18th March,09on reports the bank may spin off its ATM and point-of-sale terminals which accept credit and debit card payments.
ICICI Bank's American depository receipt (ADR) rose 3.56% to $13.08 on Tuesday, 17 March 2009.
The stock hit a high of Rs 335.90 and a low of Rs 327.10 so far during the day. The stock had a 52-week high of Rs 960.90 on 5 May 2008 and a 52-week low of Rs 252.75 on 6 March 2009.
India's largest private sector by market capitalisation has an equity capital of Rs 1113.26 crore. Face value per share is Rs 10.
The current price of Rs 335 discounts the bank's Q3 December 2008 annualized EPS of Rs 45.71, by a PE multiple of 7.32.
ICICI Bank is reportedly considering spinning off its automated teller machines (ATM) and point of sale terminals (PoS) which accept credit and debit card payments, and has sought bids from banking technology firms and private equity players.
This is the first time that an Indian bank is planning to transfer its ATM and PoS assets to a separate company. ICICI Bank reportedly has the second-largest ATM network that has more than 4,000 machines, and the largest PoS network with over two lakh terminals.
According to reports, Visa, FSS, Total Systems Services, KKR-owned First Data Corporation, Blackstone-CMS joint venture, Venture Infotek and a few private equity investors have shown interest in the deal.
Report suggested that there was a lot of interest in partnering ICICI Bank as payment is an area where many global companies are trying to get a foothold. Many banks today have an arrangement whereby ATMs are sourced from other companies, with banks paying a rent for the service. What ICICI is planning is very different: it intends to set up a new company and rope in other stakeholders.
From April 2009, banks will have to allow customers access to their accounts through any ATM in India. Non-customer transaction costs are likely to be netted by banks among themselves.
Despite the slowdown, payment services have emerged as one of the sectors that's generating interest among global players. TSYS, one of the world's largest companies for outsourced payment services, has recently set up shop in India.
The ICICI stock has fallen sharply in past few days on concerns that its Russian assets may be vulnerable as firms there struggle to stay afloat. Reports suggest that the market is quite concerned over the Russian exposure and expecting sharp write-downs as companies in Russia are in trouble.
Some days back CLSA in its research report said ICICI Bank's investments in Russia are unlikely to yield fruit in the near term. CLSA has not assigned any value to the bank's $584-million assets in Russia due to potential market-to-market losses.
CLSA added that although the bank has not reported any mark-to-market losses in Russia, the country's economic woes are expected to spoil the loan quality.
CLSA further mentioned that every additional $100 million written off on the bank's Russian assets would shed Rs 4 per share from ICICI's target price of Rs 535 a share.
ICICI's Russian arm, ICICI Bank Eurasia does not have a meaningful number of deposits and 84% of its total liabilities (including equity) in Russia are funded by group companies, the report added.
According to an earlier report dated September 2008, ICICI Bank Eurasia had assets worth $584 million (0.6% of the bank's total assets and 6% of its equity), including $434 million in the form of loans (including loans to banks and financials institutions) and $84 million in investments.
ICICI Bank Eurasia, was established in May 2005, after ICICI Bank acquired the entire equity of Investisionno-Kreditny Bank. The bank had opted for the acquisition route to save time, according to reports.
Last year, the management of ICICI Bank had to repeatedly assure investors and depositors after its exposure to collapsed Lehman Brothers triggered a slump in its share price.
ICICI Bank's net profit rose 3.4% to Rs 1272.15 crore on a 0.1% rise in sales to Rs 10350.62 crore in Q3 December 2008 over Q3 December 2007. The rise in Q3 December 2008 net profit was because earnings from fees and bond trading offset slowing credit growth and a rise in bad loans.
ICICI Bank provides retail-banking, corporate banking, cash management and treasury management services.