ICICI Bank Q3 Earnings Preview: Profit could rise 17-22%; Provisions can fall

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NEW DELHI: Expected to report strong 17-22 percent year-on-year (YoY) increase in net income for the December quarter on similar net interest income growth. Provisions will fall about 10 percent year-on-year while NIM is seen at about 4 percent.

ICICI Bank could continue its loan growth undeterred, particularly in retail, and both spreads and provisions should ease further, leading to better earnings, analysts said.

Nomura India expects ICICI Bank to report profit after tax of Rs.5,807.60 crore, up 17.6 percent year-on-year from Rs.4,939.60 crore in the same quarter last year. Net Interest Income (NII) is expected to rise 19.3 percent year-on-year to Rs.11,821.30 from Rs.9,912.50. The net interest margin is 3.88 percent, compared to 4 percent in the September quarter and 3.67 percent in the year-ago quarter.



The global brokerage firm expects provisions to fall 9.8 percent year-on-year to Rs.2,741 billion from Rs.2,474.20. Operating profit before provisions stands at Rs 10,092.70 crore, up 14.4 percent yoy.

“We expect management’s commentary on future prospects and growth trends to remain positive

Additional color around the use of emergency errors and schedules are important. NIM at Life Highs and as such progression and future comments will also be important,” Nomura said.

Prabhudas Lilladher sees a profit of Rs 6,070 crore, up 14.4 percent. The NII is up 20.8 percent year-on-year to Rs.11,978.50. Operating profit before provisions will increase 18.4 percent year-on-year to Rs.10,443.60. The margin is seen at 4 percent while the gross non-performing asset ratio is 4.4 percent.

Morgan Stanley expects the bank’s bad loan formation to decrease to Rs 3,750 crore or 2.1 per cent of the backlog of loans compared to Rs 5,580 crore (or 3.4 per cent) in the same quarter last year. Borrowing costs fall to 120 basis points, down from 144 basis points last quarter.

It builds a modest decline in the NIM to 3.96 percent after strong performance over the past few quarters.

“ICICI Bank has outperformed its large private peers in PPoP growth. We believe the continued PPoP growth performance will be the key driver for the stock,” said Morgan Stanley.

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