- ICICI Bank Q1 standalone profit expected to rise 5% amid steady loan growth and lower provisions
- Net interest income forecasted to increase 10% while net interest margin may decline to 4.18%
- Gross non-performing assets likely to inch up slightly to 1.45% from 1.4% last quarter
ICICI Bank Ltd. is expected to report a 5% rise in June-quarter standalone profit as steady loan growth and lower provisions help offset pressure on net interest margins. The lender will anounce its quarterly results on Saturday.
Net interest income is forecast to outpace overall operating income growth, while lower provisioning is expected to support profitability. Investors will also monitor whether the slight increase in gross bad loans signals any broader shift in asset quality trends.
The biggest issue this quarter is whether ICICI Bank can protect profitability as the benefit from deposit repricing fades. Analysts remain positive on loan growth and asset quality, but expect management's commentary on margin trends, credit demand and provisioning to shape expectations for the rest of the financial year.
ICICI Bank Q1 Preview - Bloomberg Estimates (Standalone, YoY)
- Net interest income seen 10% higher at Rs 23,812.85 crore versus Rs 21,635 crore
- Net interest margin seen at 4.18% versus 4.34% (4.32% QoQ)
- Operating income seen 2.8% higher at Rs 19,278 crore versus Rs 18,745.84 crore
- Provisions seen 4.8% lower at Rs 1,726.96 crore versus Rs 1,814.5 crore
- Profit seen 5% higher at Rs 13,362 crore versus Rs 12,768 crore
- Gross NPA seen at 1.45% versus 1.4% QoQ
Here's what analysts expect from ICICI Bank Q1 results
Citi
- Loan growth is expected to remain strong, led by corporate banking, mortgages, gold loans and personal loans.
- Deposit growth is likely to be supported by retail customers and current account acquisition.
- Margins may ease slightly as lower funding costs are offset by interest reversals linked to seasonal agricultural stress.
- Asset quality is expected to remain stable across retail and MSME portfolios despite seasonal farm-related slippages.
- Credit costs are likely to stay contained, helped by recoveries from corporate accounts.
- Employee costs, incentives and ESOP expenses are expected to lift operating expenses during the quarter.
Motilal Oswal
- The bank is expected to maintain healthy lending growth across retail, SME and business banking.
- Personal loan growth has improved, although commercial vehicle and some auto loan segments remain softer.
- Strong underwriting and portfolio monitoring are expected to keep asset quality stable.
- Margins are seen stabilising after the benefit from deposit repricing largely played out.
- A diversified deposit franchise and branch expansion should continue to support liability growth.
- Strong recoveries and high provisioning coverage are expected to keep credit costs under control.
DAM Capital
- Loan growth is expected to remain around 16% year-on-year and slightly ahead of the industry on a sequential basis.
- Margins are likely to remain broadly stable after adjusting for the impact of agricultural slippages.
- Provisions are expected to normalise after an unusually low base in the previous quarter, resulting in modest profit growth.
Kotak Institutional Equities
- Pre-provision operating profit is expected to remain largely unchanged from a year earlier as lower margins weigh on earnings.
- Loan growth is expected to stay around 16%, supported by a recovery in retail and SME lending.
- Margins may decline sequentially amid a competitive lending environment.
- Credit costs are expected to remain low, with no significant deterioration in provisions.
- Management commentary on margin outlook and loan growth will be the key focus for investors.
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