ICICI Bank is set to announce December 2022 quarterly earnings on Saturday. In the third quarter of FY23, experts believe that ICICI Bank’s core profitability is likely to increase due to healthy margins. Also, provisions are seen to be strong, while asset quality is expected to continue to improve. Investors will react to ICICI Bank’s third quarter earnings on Monday next week.
Friday ahead of earnings ICICI Bank stock closed on 870.40 up 0.47%. The market cap of the bank is over 6.07 lakh crores.
In Q2FY23, the bank posted a net profit 37% more than 7,558 crores 5,511 crore in the same quarter last year. Net Interest Income (NII) grew by 26% 14,787 crore in Q2FY23 as against 11,690 crore in Q2 of FY22. Net interest margin stood at 4.31% in Q2FY23.
Gross up to 30th September, 2022 NPA The ratio improved to 3.19% from 3.41% in Q1FY23 and 4.82% in Q2FY22.
What to expect from ICICI Bank’s Q3FY23?
Emkay Global in its third quarter preview report said ICICI Bank’s margins will remain in healthy territory on improved growth and asset revaluation, supporting core profitability. Also, with strong provisioning cover including contingencies, write-offs from ICICI Bank are expected to pick up.
Meanwhile, in its Q3 preview note, Kotak Institutional Equities said, “We expect PPoP to grow at ~25% as we see most operating metrics to move from positive to stable. Led by healthy contribution to debt.” Growth will be solid at ~20% across segments. The rate cycle is still favorable and hence NIM is still trending upwards.”
Furthermore, Kotak Institutional expects the bank’s provisions to remain at a low level given the low slippages and better trend on recovery/upgradation. The brokerage is building a drawdown of ~2% (~Rs.50 billion) but also sees a solid note on recovery to continue resulting in less stress from an asset quality perspective.
Among the key concerns is the reversal of the NIM as the cost of funds begins to rise sharply for the sector, especially with slower CASA growth.
Kotak Institutional expects ICICI Bank net interest income to come in 122,360 crore by 24.1% YoY and 2.7% QoQ. seen on PAT 61,938 crore up 32.2% YoY and 8.4% QoQ.
Disclaimer: The views and recommendations given above are of individual analysts or broking companies and not of Mint. We advise investors to do due diligence with certified experts before making any investment decision.
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