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Last Updated : Oct 25, 2013 12:09 PM IST | Source: Moneycontrol.com

ICICI Bank Q2 PAT may rise 11%, watch out for asset quality

Although the bank has not witnessed higher slippage from restructured book, majority of this book is still under moratorium period and quality of this book is still at risk. Bank of America Merrill Lynch expects slippages at around Rs 800-900 crore and Rs 800-1000 crore in restructuring.


Country's largest private sector lender ICICI Bank will announce its second quarter earnings on Friday. According to a CNBC-TV18 poll, its asset quality will be the key focus this time because the management had earlier cautioned that its asset quality could be under pressure.


In the June quarter, the bank managed to maintained its asset quality. Its gross non-performing advances (NPAs) rose 4 percent sequentially and net NPAs climbed 10 percent Q-o-Q, but slippages came in higher Q-o-Q to Rs 1,116 crore from Rs 780 crore. Fresh addition to restructuring was Rs 800 crore as against Rs 753 crore Q-o-Q.


As per last analyst meet, management expects fresh slippage, in additions to that, it expects restructuring to remain at elevated levels or slightly higher in current financial year 2013-14, year-on-year. After the end of Q1, the bank had guided for further restructuring (under corporate debt restructuring) of Rs 1,000-1,200 crore.


Although the bank has not witnessed higher slippage from restructured book, majority of it is still under moratorium period and quality of this book is still at risk. Bank of America Merrill Lynch sees slippages at around Rs 800-900 crore and Rs 800-1000 crore in restructuring.


However, analysts feel that the bank's retail portfolio remains healthy as the management had said during September quarter and its retail growth would remain robust and weakness persists in the corporate growth. The bank is focusing on retail book by entering in new geographical areas such as rural/semi urban.


International book (contributes 27 percent of total loan book) growth is expected to be moderate and will mainly due to rupee depreciation, analysts said.


Overall, the credit growth for the bank is likely to be 14 percent (12.3 percent in June quarter) and deposit growth at 8 percent, according to a poll.


Meanwhile, net interest margin (NIM) of the bank is expected to be stable sequentially as the bank hiked base rates by 25 basis points to 10 percent on August 22. It had reported 3.7 percent NIM in June quarter.


According to guidance, there will be a 10 basis points improvement in NIM in FY14 over FY13 (3.11 percent).

Analysts on an average expect profit after tax to rise 11 percent year-on-year to Rs 2,167 crore and net interest income to increase 17 percent Y-o-Y to Rs 3,955 crore for the quarter ended September 2013.



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First Published on Oct 24, 2013 06:48 pm
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