ICICI Bank is expected to report stellar fiscal fourth quarter results, with net profit jumping as high as 33% on-year, on the back of a good rise in net interest income, in turn led by strong growth in loans and stable asset quality. Earlier, ICICI Bank had recorded a profit after tax (PAT) growth of 34.2 per cent on-year to Rs 8,312 crore for the previous quarter October-December, and a net interest income (NII) growth of 34.6 per cent on-year to Rs 16,465 crore. ICICI Bank is due to announce its January-March quarter results on Saturday, April 22.
According to brokerage firms and analysts, ICICI Bank’s NII is expected to grow in double-digits, in the range of 29.2- 42.5 per cent, supported by stable loans growth. “We expect NII to grow at 42.5 per cent YoY higher than industry, aided by stable loan growth of ~19 per cent mainly from the retail portfolio,” said Prabhudas Lilladher. Kotak Institutional Equities added that the loan growth will remain solid at ~20 per cent YoY driven by healthy contributions from all segments. Sharekhan said: “Advances are likely to grow by ~18 per cent YoY, aided by broad based growth in all segments.”
Slippages are also expected to moderate. “We are building slippages of ~2 per cent (~Rs 50 billion) but we see a solid commentary on recovery to continue resulting in lower stress coming from asset quality perspective. Key concern would be the reversal of NIM as cost of funds is starting to move up sharply for the sector, especially with slower CASA growth.” Meanwhile, Axis Securities said that moderation in slippages along with higher recoveries will aid asset quality improvement for ICICI Bank.
Brokerage Estimates for HDFC Bank Q4 FY23 financial results (on-year comparisons)
Kotak Institutional EquitiesNII: Rs 17,000 crore; up 33.1%Net Profit: Rs 9,000 crore; up 28.7%
Axis SecuritiesNII: Rs 17,233 crore; up 36.7%Net profit: Rs 8,714 crore; up 24.2%
BNP ParibasNII: Rs 16,000 crore; up 29.2%PPoP: Rs 13,000 crore; up 26.5%Net profit: Rs 9,000 crore; 33.1%
Elara CapitalNet sales: Rs 17,000 crore; up 36%Net profit: Rs 8,000 crore; up 21%
Prabhudas LilladherNII: Rs 17,000 crore; up 42.5%PPoP: Rs 14,000 crore; up 40.1%Net profit: Rs 9,000 crore; up 31.7%
SharekhanNII: Rs 17,166 crore; up 36.2%PPoP: Rs 14,039 crore; up 36.4%Net profit: Rs 9,074 crore; up 29.3%
What to watch from ICICI Bank Q4FY23 results?
“On an overall, we expect ICICI Bank to report strong profitability among large banks, while Axis Bank is expected to sink into losses due to write-offs of goodwill on Citi Bank’s portfolio acquisition,” said Emkay Global. While ICICI Bank was one of the preferred picks among large private banks for brokerage firms and also one of the top picks from the Nifty results’ point of view, what will be the key things to look out for in the Q4FY23 results? According to Axis Securities, key monitorables in the fourth quarter results will be NIM outlook, comments on deposit accretion and margins outlook.
In an earlier regulatory filing, ICICI Bank had said that the Board of the Bank at its meeting on April 22 will also consider “fundraising by way of issuance of debt securities including non-convertible debentures/bonds/notes/offshore certificate of deposits in single/multiple tranches in any currency through public/private placement and buyback of securities within the limits that the Board is authorised to approve under applicable law.”