Country's largest private sector lender ICICI Bank is expected to see earnings pressure in Q3 owing to elevated slippages and higher provisions. Profit is seen falling 27.8 percent year-on-year to Rs 2,180.2 crore in the quarter ended December 2016.
Net interest income, the difference between interest earned and interest expended, may decline 1.7 percent to Rs 5,359.1 crore compared with Rs 5,453 crore in year-ago period.
Analysts expect slippages to remain on the higher end between Rs 7,000-8,000 crore (against Rs 8,029 crore in Q2). Hence, slippages from restructured book and movement of stressed assets (sale to asset reconstruction companies, addition to S4A, 5/25 & SDR) will be closely seen.
While income may be under pressure, low cost deposit flow is likely to aid Q3 owing to demonetisation.
Management commentary on future outlook of stressed loans (like their view on stressed assets turn around; slippage from watchlist going ahead; the movement in watchlist, restructuring of stressed accounts via 5/25, S4A or SDR route, etc) will be very important to watch out for on Tuesday.
Analysts expect loan growth at around 10-12 percent YoY (against 10.88 percent in Q2 YoY).Restructured book at the end of September quarter was worth Rs 6,336 crore (1.4 percent of the loan book) and watchlist was at Rs 32,490 crore (7.15 percent of the loan book).
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