---
endpoint: analytics
pattern: Financial Services
status: done
latency_ms: 174800
conversation_id: 0cb96966-ad18-466d-a713-ff3f8dea18ac
citations: 0
created: 2026-05-31 19:31:54Z
---

# Is CLSA incrementally more positive/negative on ICICI Bank. If so, why?

## CLSA on ICICI Bank — Incrementally **modestly more positive**, but largely a roll-forward call rather than an earnings upgrade

**Bottom line**: Across CLSA's most recent set of internal notes (latest ingested = 24 Jun 2025), the broker is **incrementally more positive** on ICICI Bank — but the lift is driven primarily by a valuation roll-forward and ICICIB's *relative* outperformance vs deteriorating peers, not by a meaningful earnings upgrade. ICICIB remains one of CLSA's top private-bank picks (alongside Bandhan).

> **Corpus vintage caveat**: CLSA's latest ICICIBC-related note in this archive is dated 24 Jun 2025 — roughly 11 months stale vs today (31 May 2026). The directional conclusions below describe CLSA's trajectory *through mid-2025*; subsequent notes are not in the workspace.

---

### 1. Rating + target price — incrementally positive

| Date | Rating | TP (Rs) | Δ TP | Driver |
|---|---|---|---|---|
| Prior (pre-Apr 2025) | O-PF | 1,600 | — | — |
| **20 Apr 2025** (standalone 4QFY25 note) | **O-PF maintained** | **1,700** | **+6.25%** | Valuation roll-forward to Mar 2027; estimates "largely unchanged" [1] |

- Apr 20 note headline: *"Never stops surprising — Strong 4Q24 performance; reiterate as top bank pick along with Bandhan."* PPOP/PAT beat CLSA estimates by **8%/11%** [1].
- The TP hike is largely **mechanical** (rolling the residual-income window forward by a year), not an earnings upgrade — FY26/27 PAT estimates were left effectively flat (PAT FY26 change: 0.0%; FY27: +1.9%) [5].

### 2. Why CLSA is incrementally more positive — five reasons

**a) NIM resilience while sector compresses.** ICICIB's reported NIM expanded **+16bps QoQ to 4.4%** in 4QFY25 — a positive surprise; even adjusted for accounting one-offs, the underlying improvement was still 6-7bps QoQ. The bank also cut savings-deposit rates by 25bps in April, providing further NIM support [2]. CLSA models sector NIM compression in FY26 broadly, with ICICIB best-positioned given CASA stability.

**b) CASA stability — the only large bank that held the line.** ICICIB delivered **13% CASA deposit growth** (the standout in the peer set), and CASA ratio declined only 40bps YoY — versus Kotak/HDFCB showing sharper CASA erosion since FY22 [2].

**c) Asset-quality / credit-cost edge — only outright credit-cost cut.** Post-results, CLSA **cut ICICIB's FY26 credit-cost estimate by -5bps to 0.56%**, versus a **+23bps hike for IIB** and largely flat estimates elsewhere [6]. ICICIB's modelled credit cost (0.6% FY26-FY28) is among the lowest in the coverage [7]. Investment-thesis chunk: *"asset quality has improved meaningfully... credit costs are low. Highest estimated ROE among all large banks under our coverage."* [8]

**d) Profitability over growth — the right posture for the cycle.** 4QFY25 was characterised as "prioritising profitability over growth": loan growth moderated to **13% YoY** (from mid-teens), but opex grew below loan growth as guided, business banking continued **+30% YoY**, and gross slippage improved to **1.6%**. CLSA expects ROE to remain at **16-17%**, or **2-3ppt above peers** [1][3].

**e) Reaffirmed top pick.** Explicit language in the standalone note: *"it is one of our top financial picks"* alongside Bandhan [3]. Key catalysts CLSA flags: high-teens loan growth driven by retail + sustaining NIM above 4% [4].

### 3. One yellow flag in the latest note

In the **24 Jun 2025 monthly** ("India Financials – May 2025: Stable month"), CLSA highlighted a **negative surprise on ICICIB credit cards**: spends growth moderated sharply from high-teens to **8% YoY (weakest in 20 months)**, with a **net attrition of 32k cards** in May — versus HDFCB's continued outperformance (+275k card additions, 36% of industry net adds) [9]. Not enough to dent the O-PF rating, but it's an early softening signal on the retail-card franchise that did not exist a quarter earlier.

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### Summary table — direction of incremental change

| Vector | Direction | Magnitude | Note |
|---|---|---|---|
| Rating | Flat at O-PF | — | Maintained as top pick [1][3] |
| Target price | **Up** | +6.25% (Rs1,600 → 1,700) | Valuation roll-forward, not estimate upgrade [1] |
| FY26 PAT estimate | Flat | 0.0% | "Largely unchanged" [5] |
| FY27 PAT estimate | **Up** | +1.9% | Marginal [5] |
| FY26 credit-cost assumption | **Down** | -5bps to 0.56% | Only outright cut in private banks ex-KMB/HDFCB [6] |
| Relative positioning vs peers | **More constructive** | — | Best-in-class NIM, CASA, ROE; only IIB cut hard [6][7] |
| Retail card momentum (latest data point) | **Caution** | — | Spends growth 8% YoY, net card attrition in May 2025 [9] |

**Verdict**: CLSA is incrementally more positive — but it's a *relative* / *roll-forward* positive: ICICIB stands out **because peers were cut harder** (IIB FY26 PAT -42%; HDFCB -2.6%; KMB -4.8%; SBI -4.3% [5]) and because valuation was rolled. The thesis is unchanged: NIM resilience + best-in-class asset quality + highest ROE in the cohort = continued top private-bank pick.

---
**Sources**
[1] India Banks – ICICI Bank, O-PF, "Never stops surprising" — CLSA (20 Apr 2025) — 607956313LinqAlpha.PDF
[2] India Banks – ICICI Bank, O-PF — CLSA (20 Apr 2025) — 607956313LinqAlpha.PDF (NIM / CASA detail)
[3] India Banks – ICICI Bank, O-PF — CLSA (20 Apr 2025) — 607956313LinqAlpha.PDF (top financial pick, ROE 16-17%)
[4] India Banks – ICICI Bank, O-PF — CLSA (20 Apr 2025) — 607956313LinqAlpha.PDF (catalysts)
[5] India Banks – ICICI Bank, O-PF — CLSA (20 Apr 2025) — 607956313LinqAlpha.PDF (old vs new estimates table)
[6] India Financials (4QFY25 Review: Divergent trends) — CLSA (28 May 2025) — 607960783LinqAlpha.PDF (credit-cost estimate changes)
[7] India Financials (4QFY25 Review) — CLSA (28 May 2025) — 607960783LinqAlpha.PDF (credit-cost assumptions FY18-28)
[8] India Financials (4QFY25 Review) — CLSA (28 May 2025) — 607960783LinqAlpha.PDF (ICICI Bank investment thesis)
[9] India Financials (May 2025: Stable month) — CLSA (24 Jun 2025) — 607962715LinqAlpha.PDF (ICICIB credit-card spends moderation + card attrition)

