Shares of ICICI Bank surged in the special one-hour muhurat trading session on October 21 after the lender reported another quarter of strong earnings and loan growth.
The private sector lender reported a 37 percent year-on-year rise in net profit to Rs 7,557.8 crore for the quarter that ended September, which was better than a CNBC-TV18 poll of Rs 7,364.8 crore.
The lender’s net interest income during the quarter surged 26.5 percent on-year to Rs 14,786.8 crore reflecting strong loan growth. Loans grew at the rate of nearly 23 percent on a year-on-year basis, the best rate of growth in 24 quarters.
Similarly, the bank’s asset quality continued to improve as gross bad loans and net bad loans tumbled to their lowest levels in nearly eight years. The gross non-performing assets ratio came in at 3.19 percent for the reported quarter as against 3.4 percent in the previous quarter.
“ICICI Bank reported a spectacular set of numbers with NIM (net interest margin) for the quarter being highest in at least a decade and RoA (return on asset) for the quarter being the second highest since at least 2007,” said Nuvama Wealth Management in a note.
Shares of ICICI Bank have risen 23 percent so far in 2022, outperforming the Nifty Bank index as well as the Nifty 50 index. Over the past three years, the stock has more than doubled its price on improving asset quality and growth prospects.
The lender’s net interest margin surged to 4.3 percent, a record high and now at a substantial distance to India’s largest private sector lender by assets – HDFC Bank.
“We believe ICICI Bank is best placed among peer banks given its strong digital capabilities to underwrite loan at an accelerated pace,” brokerage firm Phillips Capital said in a note.
Both Nuavama Wealth and Phillips Capital marginally raised their price targets on the stock following the September quarter results while retaining their ‘buy’ call.
At 6:30 pm, shares of ICICI Bank were up nearly 2 percent at Rs 922.8 on the National Stock Exchange.
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