ICICI Bank Q1 profit seen up 10%, provisions may increase

Within other income, key factor to watch out for would be its fee income as the management expects double digit fee income growth in FY16. In Q4FY15, other income grew by 17.5 percent Y-o-Y to Rs 3,496 crore with fee income up 8.3 percent.

As far as its asset quality is concerned, the management post Q4FY15 earnings said stressed asset accretion in FY16 should be lower than FY15. Slippage from restructured book need to be watched as stressed asset formation remained high in last quarter with slippages of Rs 3,260 crore (against Rs 2,280 crore Q-o-Q) and 69 percent of slippages were from restructured book. Even in FY15, slippages jumped 25 percent.

The bank post Q4 said the restructured pipeline was Rs 1,500 crore. In March quarter, asset quality worsened with the gross non-performing assets up 15.4 percent and net NPA up 31 percent on sequential basis.

Loan growth is expected to be 14 percent led by retail book for June quarter. After FY15 earnings, ICICI Bank said it was targeting 18-20 percent growth in FY16 led by retail growth of 25 percent and domestic corporate growth of 10-15 percent. As of March quarter, retail contributed 42 percent of bank’s loan book.

Net interest margin sustainability is also going to be watched as it is likely to be supported by improved mix change in retail and even the bank post March quarter said margin could be sustained at 3.5 percent. NIM in Q4 was aided by refund from income tax of Rs 100 crore and it has around or above 3.3 percent since Q4FY13.