ICICI Bank’s increased digital push excites investors

The management noted that there has been a rapid growth in customer data in the banking sector over the past few years, including the rapid growth in digital payments. In addition, 74% of ICICI Bank customers are digitally active.

According to the management, Retail Internet Banking (iMobile) has 19 monthly logins per user and Corporate Internet Banking (InstaBIZ) has 37 monthly logins per user. The bank has seen 45 lakh activations in iMobile Pay from non-ICICI Bank customers and 10% of users have purchased an ICICI Bank product. The management said that the average ticket size on iMobile Pay has increased by 45% year-on-year.

A range of brokerages gave a thumbs up to the bank’s digital emphasis and maintained their positive stance on the stock. “We believe ICICI Bank is at the fore in technology prowess and adoption among peers,” analysts at JM Financial Institutional Securities Ltd said in a report. While some banks are still focused on fine-tuning their back-end technology, said analysts at Emkay Global, ICICI, with its early-stage investments, is now offering industry-first technology front-end access to captive/NTB customers. and is focusing on offerings and gaining market share.” Financial Services Limited said.

Among overseas research houses, CLSA Limited stated that the bank is ahead of its peers in its digital initiatives and is also a new growth leader. CLSA said that ICICI is one of its top choices in this area.

Despite this optimism, there were no fireworks on Monday as far as the stock’s response is concerned. However, on Tuesday, the stock rose nearly 4% in intraday on NSE. That said, valuations may not improve in a hurry. Some analysts say that execution is key here and it has an impact on earnings.

“The latest strategy promises a leap from “good to great.” We take a deep franchise focus on the vast assets and liabilities of the data to predict if the bank will be working along the lines expressed in its presentation. If executed, its success and hence a sustained re-rating of the sector-leadership valuation is possible, said Edelweiss Securities Ltd.

Analyst at Nomura Financial Advisory & Securities (India) Pvt Ltd. Ltd. explains that the core bank (excluding subsidiaries) trades on a value-to-book basis (at current book value) at a valuation multiplier of 2.5 times, retreating from key levels of 2.8-3 times. “We expect another re-rating, i.e. more than 2.8-3 times price-to-book, to deliver steady earnings per share growth over several years,” it said in a report.