ICICI Bank Q3 preview: Analysts expect double-digit growth in profit, NII

Country's largest private sector lender ICICI Bank is likely to show further improvement in earnings with loan growth and net interest income in double digits.

Slippages may moderate and asset quality is likely to be stable in Q3. Profitability is likely to be supported by higher treasury income and pre-provisioning profit during the quarter.

Brokerages expect 5-40 percent on-year growth in profit but sequentially it is expected to show a massive 80-150 percent increase on a low base.

Reliance Securities, Motilal Oswal, Edelweiss Securities and Sharekhan expect more than 100 percent increase QoQ in profitability.

Net interest income, the difference between interest earned and interest expended, may grow in the range of 13-20 percent compared to year-ago with loan growth of around 13-15 percent.

"We expect steady improvement in earnings trajectory led by a recovery in loan growth (around 15 percent YoY) and strong NII growth (20 percent YoY)," Kotak Securities said, adding net interest margin may be flat/marginally positive QoQ.

Motilal Oswal expects loan growth to be around 13 percent YoY, driven largely by retail loans. "Corporate loan growth would be moderate while overseas book would continue to see a decline. Deposit is expected to grow at around 12 percent YoY."

According to the research house, net interest income is expected to grow around 16 percent YoY, whereas Emkay said net interest margin is likely to be stable in Q3, but may look better in Q4 on the back of heavy NPA resolutions.

Overall brokerages expect other income (non-interest income) as well as operating profit to grow more than 20 percent.

Asset quality may see some improvement in Q3 as slippages could stabilise, brokerages said.

Kotak Securities expects reduction in gross NPLs on the back of resolution as well as write-offs. At the same time, watchlist loans will decline QoQ and coverage ratio will improve QoQ, it said.

Gross slippages are expected to moderate to 2.4 percent due to reduction in corporate slippages, Motilal Oswal said, adding net stress loans during Q2FY19 stood at 5.9 percent of loans and are expected to decline further as incremental stress addition moderates.

Emkay sees slippages in the range of Rs 3,000-4,000 crore for the quarter.

Source:https://www.moneycontrol.com/news/business/earnings/icici-bank-q3-preview-analysts-expect-double-digit-growth-in-profit-nii-3450391.html

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