ICICI Bank Q2 preview: Strong deposit, loan growth to drive NII, profit; margin may see minor dip

Over the July-September period, shares of ICICI Bank have surged 6 percent

India's second-largest private lender ICICI Bank is expected to clock decent July-September quarter (Q2FY25) results, backed by healthy loan and deposit growth. No major stress is likely to be seen in asset quality and margin contraction is expected to be limited, said analysts. The lender will release its Q2 scorecard on October 26.

According to Moneycontrol poll of eight brokerage estimates, ICICI Bank's net interest income (NII) is pegged to grow 14 percent year-on-year (YoY) to Rs 20,845 crore in Q2FY25 from Rs 18,308 crore in Q2FY24. Profit, too, is estimated to rise by 7 percent YoY to Rs 10,667 crore in Q2FY25, as compared to Rs 10,261 crore in the year-ago period.

What factors are driving the earnings?

Healthy loan, deposit growth: Analysts on a consensus estimate ICICI Bank's deposit growth to remain in-line with credit growth. For instance, Motilal Oswal analysts modeled the lender's deposit to grow 14.6 percent YoY to Rs 14.8 lakh crore in Q2FY25. Similarly, loan is expected to increase by 14.6 percent YoY to Rs 12.7 lakh crore during the quarter under review.

Limited margin moderation: Brokerages have pegged that the private lender's margins are likely to moderate annually slightly with a negative bias. However, it is expected to remain unchanged on a sequential basis. In Q2FY25, NIMs are expected at 4.4 percent from 4.5 percent in Q2FY24.

Stable asset quality: ICICI Bank's gross non-performing asset (GNPA) is expected to reduce to 2.3 percent in Q2FY25 from 2.5 percent in the year-ago period. Meanwhile, net NPA is likely to see a slight uptick to 0.5 percent in Q2FY25 from 0.4 percent in Q2FY24.

What to look out for in the quarterly show?

The management commentary on the sustainability of margins, recovery of assets, and comments on the growth of unsecured loan books will be keenly watched.

Over the July-September period, shares of ICICI Bank have surged 6 percent, significantly beating benchmark Nifty 50's 1 percent rise.

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