ICICI Bank Q2: Analysts expect 22% growth in PAT

Country's largest private sector lender ICICI Bank is set to declare its second quarter numbers for the current financial year 2012-13 today. Analysts on an average expect the company's profit after tax to grow by 22 percent year-on-year to Rs 1,829 crore for the quarter.

Net interest income is likely to rise by 30 percent to Rs 3,256 crore from Rs 2,506 crore during the same period.

The previous quarter (April-June) was quite strong for the bank on all parameters. Net interest margins were maintained at 3.01 percent and restructured book was lower with net interest income & especially profit after tax came in higher than estimates.

Analysts expect the trend to continue in the second quarter too; hence any negative deviation from the performance previous quarter will be a disappointment for the stock.

According to analysts, only particular account being watched for is Deccan Chronicle Holdings (DCHL). Hence, analysts are watching out for how it will be treated, but is still small in absolute amounts. Other private banks (Yes Bank / HDFC Bank / Axis Bank) have shown sustained or improved asset quality, reaffirming that ICICI Bank will be fine but the rabbit in the hat could be a surprise on other chunkier accounts (which is not being factored in as of now), say analysts.

The bank restructured loans worth Rs 4,172 crore in June quarter as against Rs 4,256 crore in March quarter.

Gross non-performing assets declined by 8 basis points to 3.54 percent QoQ and net NPAs fell by just 2 basis points to 0.71 percent in the June quarter.

Analysts expect the net interest margin to remain stable within the 2.9 percent to 3 percent range.

Even loan growth is expected to remain healthy at 18 percent YoY led by the domestic segment. In the previous quarter, advances grew by 22 percent while deposits went up 17 percent.

Within non interest income (which is largely expected to be subdued), the bank is expected to post trading profits in the second quarter of FY13 as against a trading loss of Rs 80 crore in a year ago quarter. Fee income is expected to be muted and the bank will record lower dividend income QoQ.

In June quarter, non interest income grew by 14.4 percent YoY to Rs 1,880 crore; fee income was up by 4.4 percent to Rs 1,647 crore and treasury loss stood at Rs 21 crore.

The stock rose 0.64 percent to close at Rs 1,086.15 on Thursday. In the year 2012, the stock rallied 54 percent.