ICICI Bank Q1 preview: Lender may report strong net profit growth, stable asset quality

MUMBAI: is set to report strong earnings growth for the quarter ended June and stable asset quality aided by a low base and limited disruption to business during the second wave of Covid-19 infections.

The lender is likely to report 77 per cent year-on-year growth in net profit to Rs 4,596 crore for the quarter ended June, according to a poll by ETMarkets.com. The strong bottomline performance will be matched by 15 per cent growth in net interest income in the quarter for the bank.

On a sequential basis, the lender’s net interest income is likely to grow 2 per cent, while its bottomline may climb 4.4 per cent as business activity in the quarter was not as adversely disrupted by the second wave as it was in the year-ago quarter.

The lender will report its June quarter earnings on Saturday.

“We expect steady performance from the bank with steady loan growth momentum and steady NIMs,” said brokerage firm Edelweiss Securities. Brokerage firm Kotak Institutional Equities expects the lender’s loan-loss provisions in the quarter to slump nearly 70 per cent on-year.

Kotak Equities expects loan growth for the company to accelerate to 15-16 per cent in the reporting quarter helped by strong demand in the retail portfolio and minimal business disruption.

That said, ICICI Bank’s profitability will take a hit in the quarter due to the absence of Covid-19 related cost benefits seen in the year-ago quarter. Brokerages expect pre-provision operating profit to tank 12-17 per cent in the June quarter as expenses likely rose.

“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% but we see a solid commentary on recovery to normalized levels of their loan book from an asset quality perspective,” Kotak Equities said.