ICICI Bank is much better bank in terms of asset quality: Angel Broking

In a chat with ET Now, P Phani Sekhar, Fund Manager-PMS, Angel Broking, shares his views on ICICI.

ET Now: What are your thoughts on ICICI Bank because suddenly markets are of the view that the NPA problem is not only limited and restricted to PSU banks? Given the way how NPA numbers have come out from ICICI Bank and Axis Bank, there are problems elsewhere as well?

P Phani Sekhar: That is right to a great extent because from a systemic point of view, it is not possible that only the larger PSU banks will have the NPA problems while ICICI Bank which is the second largest bank in the country will be immuned. But having said that, one has to look at the trajectory of the growth of ICICI Bank in the last three years where they have consciously come out of the riskier segments such as the auto segment, then they have actually not been predatory in their pricing in the home loan segment.

It is very interesting that whatever market share has been left by ICICI Bank has been lapped up greedily by many of these public sector banks and I believe that much of that is showing up in stress, both in the corporate as well as on the retail side. So on the balance, ICICI Bank is a much better bank than what it was maybe three years back in terms of its asset quality.

They have been successfully offloading their share of the Kingfisher debt while many of the public sector banks are still struggling and that is actually showing up in the kind of asset quality that they have been reporting. So, although I will be a bit concerned about what lies ahead in terms of incremental provisions that the bank has to make. But the size of the bank and the valuations at which it is trading and the corresponding asset quality figures that I am seeing for the public sector banks, ICICI Bank is ripe for some kind of re-rating as compared to its public sector peers over the near to medium term.