New Delhi: ICICI Bank has been the best performer in the banking sector as it delivered 80 percent/42 percent returns over FY21/FY22 Year to date, Motilal Oswal Institutional Equities said in a report.

Its market capitalization ranking within the BFSI space has improved to two from five in FY18. The stability of the top management has helped improve its operational performance. Sandeep Bakhshi's appointment as CEO has brought stability which enabled value creation and drove rerating as the bank delivered 31 percent CAGR in m-cap since FY18-21 v/s 7 percent over FY10-18.

ICICI Bank reclaims the second slot after 7-8 years, overtaking Kotak Mahindra and HDFC Bank.

ICICIBC has delivered 34 percent earnings CAGR over FY18-21 v/s a 15 per cent decline over FY15- 18. This has enabled 31 per cent CAGR in m-cap over FY18-21. During FY21/FY22 YTD, the stock has returned 80 per cent/42 per cent, making it one of the best performers in the Banking sector.

Consequently, its m-cap rankings within the BFSI space improved to second from fifth in FY18. ICICIBC's share in total Private Banks' m-cap under our coverage rose to 20 percent from 11 percent in FY18. We expect the bank to deliver a 28 percent earnings CAGR over FY21-24E. This will enable its continued outperformance vs. its peers and further raise its m-cap contribution in the Private Banking space, in our view, the report said.

It has reported strong progression in NIMs, narrowing the gap with sector leaders. With a higher mix of floating rate loans and our view on a reversal in the rate cycle, we expect portfolio yields to remain steady, driving 20 percent CAGR in NII over FY21-24E. NNPA declined to sub-1 percent - the lowest level since December 2014.

Source: IANS