ICICI Bank April-June net profit seen at ₹2,085 crore
ICICI Bank had reported a net loss in Q1 FY19 on a stand-alone basisIt was also the first time it had posted losses from its India operations
Private sector lender ICICI Bank is expected to report a net profit of ₹2,085 crore for the June quarter of FY20 on Saturday compared to a net loss of ₹120 crore in the year-ago period, according to a Bloomberg estimate of 21 analysts.
The bank had reported a net loss in Q1 FY19 on a stand-alone basis on account of rising bad loans and treasury losses. It was also the first time it had posted losses from its India operations.
Analysts at Kotak Institutional Equities expect core earnings trajectory to remain strong at 15% year-on-year (y-o-y), led by healthy loan growth of 15% y-o-y and better net interest income (NII) growth at 19% y-o-y.
The bank’s net interest margin (NIM) – a key measure of profitability -- is expected to decline 10 basis points (bps) sequentially.
“We expect reduction in gross non-performing loan on the back of write-offs. Credit costs will decline quarter-on-quarter (q-o-q) led by lower slippages (primarily from agriculture). Below investment grade portfolio would decline and coverage ratio would improve sequentially," said a report by Kotak Institutional Equities.
Meanwhile, analysts at Reliance Securities believe that market share gains by ICICI Bank will continue to aid growth in the corporate loan portfolio and driven by an increasing share of retail loans, margins are expected to increase.
Stock broking firm Prabhudas Lilladher said in a report that the private sector lender was expected to post a net interest income (NII) of ₹7,689 crore for the June quarter of FY20, up 26% from the same quarter last year. It expects the bank’s pre-provisioning operating profit to touch ₹6,443 crore, up 3.4% y-o-y.
“ICICI Bank’s loans should grow at 13-14% y-o-y," said a report by Prabhudas Lilladher, adding that all private banks will continue to focus on retail term deposits while current account savings account (CASA) growth should be slower at 10-12% y-o-y.
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