ICICI Bank Ltd is likely to report a strong 36-46 percent year-on-year (YoY) rise in net profit for the quarter ended March 2022. Experts expect the private lender to report a 20-24 percent on-year growth in its net interest income (NII) when it declares its results on Saturday, April 23.
ICICI Bank may continue to witness strong traction in loan growth especially to the SME (small and medium enterprise) segment, and both slippages and provisions are expected to drop further, resulting in better earnings, experts said.
The bank had reported a standalone profit after tax (PAT) of Rs 4,403 crore during the corresponding quarter of the previous financial year when its NII (the difference between interest earned and interest expended) during the quarter came in at Rs 10,341 crore.
PAT during the October to December period of the current financial year stood at Rs 6,194 crore on NII of Rs 12,236 crore.
Brokerage Motilal Oswal Financial Services forecasts PAT to increase 46.5 percent on an annualised basis to Rs 6,450 crore as it expects NII to jump 23.6 percent from a year earlier to Rs 12,890 crore. Net interest margins are expected to remain stable at ~4 percent.
“The bank is becoming a new growth leader in the SME and retail segments aided by continued investments in technology and partnerships with new ecosystem players,” Motilal Oswal said in its report. Overall, it expects a loan compound annual growth of 18 percent over FY22-24 for the bank.
Deposit and loan growth during the quarter are expected at 13.5 percent and 16.4 percent, respectively. Gross NPAs (non-performing assets) are expected to decline by 100 basis points (bps) year-on-year to 4 percent and marginally by 10 bps sequentially. Net NPAs during the quarter are seen declining by 30 bps from last year to 0.8 percent and by 10 bps on a sequential basis.
Emkay Research on its part expects a 36 percent on year rise in PAT for the quarter but on a sequential basis, it expects profit to decline 3 percent to Rs 5,996 crore.
Click Here To Read All Earnings Related News
NII at Rs 12,814 is seen rising by 22.8 percent on an annualised basis and by 4.7 percent quarterly. Net interest margins are seen stable at 4 percent sequentially but improving marginally on a yearly basis.
“Bank to report healthy profitability led by better margins, fees and contained credit cost,” a report from Emkay Research said. It expects slippages to moderate quarter-on-quarter with retail stress receding. It also sees the bank reversing part of its Covid provisions during the quarter.
“We expect provisions to slide down to 1 percent of loans as there is negligible risk on asset quality currently,” a report from Kotak Institutional Equites said.
Kotak expects NII to grow 19.5 percent annually to Rs 12,463 crore and 1.9 percent sequentially. It sees net profit surging by 63.9 percent to Rs 7,216 crore.
“We build in slippages of ~1.8 percent (Rs 3,700 crore) but we see a solid commentary on recovery to continue, resulting in lower stress coming from asset quality perspective,” Kotak added in its report.
Experts feel the key focus areas would be commentary on credit cost, outlook for net interest margins, asset quality and movement in stressed loans.
Disclaimer: The views and investment tips of investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
