The information provided should not be considered a recommendation to purchase or sell any particular security. It should not be assumed that any of the securities discussed here were, or will prove to be, profitable.
Video Transcript
ICICI Bank is one of the largest stocks held in TEMIT. It is the second largest private sector bank in India and offers its customers a full suite of services across retail, corporate and commercial banking. The bank also has strong subsidiaries which are amongst the top 3 players in the asset management, insurance and broking industries. The reason we like ICICI Bank is a simple one – it is a well-managed, market leader that operates in the one of the world’s most underpenetrated banking systems.
The ratio of household debt to GDP in India is around 35% – significantly behind many other countries including China at over 60% and the UK at almost 85% - indicating significant headroom for future growth in household borrowing. With the Indian economy expected to be one of the worlds’ fastest growing economies over the next decade, we expect to see sustained loan growth in the banking system, benefiting industry leaders such as ICICI.
Meanwhile, the new management team is pursuing a digital transformation across multiple lines of business. This has resulted in the bank being transformed into a low-risk steady, compounder offering returns with consistent market share gains thanks to its strong position on capital, funding and technology.
Finally, from a sustainability perspective, as one of the largest banks in the country, ICICI Bank has an important role to play in providing access to capital to critical parts of the economy:
- To individuals for fulfilling basic needs like housing
- To small businesses which are the heart of employment creation and economic development
- and finally, to large corporates involved in segments like infrastructure, renewable energy and healthcare.
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How to Invest with Us
Shares in TEMIT qualify as an investment which can be held through an ISA. TEMIT is available through a stocks and shares ISA from a number of different companies. Your financial adviser will be able to give you full details of the options available to you.
Important Legal Information
This information is issued and approved by Franklin Templeton Investment Management Limited (FTIML). It does not constitute investment advice. The information provided should not be considered a recommendation to purchase or sell any particular security. It should not be assumed that any of the security transactions discussed here were or will prove to be profitable. These opinions are not intended to be a forecast of future events, research, a guarantee of future results or investment advice. Past performance is not a guide to future returns. The return may increase or decrease as a result of fluctuations in the markets, in currency and/or in the portfolio.
Market and currency movements may cause the capital value of shares, and the income from them, to fall as well as rise and you may get back less than you invested. The analysis of Environmental, Social and Governance (ESG) factors form an important part of the investment process and helps inform investment decisions. The strategy does not necessarily target particular sustainability outcomes. The opinions contained in this document are those of the named manager(s). They may not necessarily represent the views of other managers, strategies or funds. Shares in investment trusts are traded on a stock market and the share price will fluctuate in accordance with supply and demand and may not reflect the value of underlying net asset value of the shares. The majority of charges will be deducted from the capital of the company. This will constrain capital growth of the company in order to maintain the income streams.