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ICICI Bank Upgraded to Strong Buy

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On Mar 9, Zacks Investment Research upgraded ICICI Bank Ltd. (IBN - Free Report) to Zacks Rank #1 (Strong Buy).

Why the Upgrade?

ICICI Bank has been witnessing rising earnings estimates owing to strong fiscal third quarter 2013 results. Moreover, this foreign bank has a long-term earnings growth forecast of 22.0%.

ICICI Bank reported fiscal third-quarter results on Jan 31. Net income came surged 30% year over year to INR22.50 billion ($409 million). Results were primarily aided by a solid top-line growth, partially offset by increases in loan loss provisions and operating expenses.

Net interest income augmented 29% from the prior-year quarter to INR27.12 billion ($493 million). Similarly, non-interest income jumped 17% to INR18.92 billion ($344 million). Operating expenses for the quarter totaled INR22.61 billion ($411 million), up 18% year over year, primarily attributable to the bank’s branch-network expansion. Provisions for the reported quarter increased 8% year over year to INR3.69 billion ($67 million).

ICICI Bank’s credit quality was a mixed bag during the quarter. As of Dec 31, 2012, net nonperforming assets were INR21.85 billion ($397 million), rising 5% from the prior-year quarter. The bank's net nonperforming asset ratio stood at 0.64%, declining 6 bps from the year-ago period.

The Zacks Consensus Estimate for fiscal 2013 increased 2.6% to $2.75 per share over the last 60 days. For fiscal 2014, the Zacks Consensus Estimate moved up by 2.5% to $3.30 per share, over the same time frame.

Other Foreign Stocks to Consider

Besides ICICI Bank, other foreign banks like Banco Bilbao Vizcaya Argentaria, S.A. (BBVA - Free Report) , Banco Macro S.A. (BMA - Free Report) and Shinhan Financial Group Company Limited (SHG - Free Report) carry a Zacks Rank #1 and are worth considering.

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