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ICICI Bank Q1 preview: Brokerages see healthy growth; commentary on asset quality, stressed loans eyed

Edelweiss Securities expects steady performance from the bank with steady loan growth momentum and steady net interest margins.

July 24, 2021 / 07:51 AM IST

ICICI Bank will release its June quarter scorecard on July 24 which is likely to show healthy growth in profit and a steady trend in net interest margins and net interest incomes.

Brokerages expect commentary on asset quality and movement in stressed loans to remain in focus when the bank comes out with the Q1 FY22 scorecard.

The bank had reported a massive 260.5 percent year-on-year (YoY) growth in standalone profit at Rs 4,402.61 crore for the quarter ending March 2021.

Brokerage firm Edelweiss Securities expects a steady performance from the bank with steady loan growth momentum and steady net interest margins (NIMs).

"Asset quality will not likely see any major challenges and we expect the commentary to be positive which also might corroborate with the bank using some contingency buffer created earlier," said the brokerage.

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Edelweiss expects the bank's core PAT to jump 72 percent year-on-year (YoY). Pre-provision operating profit (PPOP), however, may fall 20 percent YoY and total income may see a 6 percent YoY fall.

Brokerage firm Motilal Oswal Financial Services expects a 15.6 percent YoY jump in net interest income (NII) of the bank. Net profit, as per the brokerage, may jump 59.1 percent YoY.

"The bank's loan growth is likely to remain modest and margins may be stable at nearly 3.9 percent," Motilal Oswal said.

The estimates of Kotak Institutional Equities show a 12.5 percent YoY growth in NII while net income may jump 60 percent YoY. Kotak expects an 89.2 percent YoY jump in the bank's PAT.

Moreover, it expects a PPOP growth of about 15 percent YoY (adjusted for treasury income in the base quarter) with adjusted revenue growth at 19 percent YoY.

Loan growth would accelerate to nearly 15-16 percent. NIM (core) may remain stable QoQ at 3.8 percent, Kotak believes.

"We expect provisions to slide down and the bank is likely to use some of the COVID provisions made in FY2021. We are building slippages of 2 percent (Rs 4000 crore) but we see a solid commentary on recovery to normalized levels of their loan book from an asset quality perspective," Kotak said.

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.
Moneycontrol News
first published: Jul 24, 2021 07:51 am

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