ICICI Bank Q1 preview: Profit may jump 60% on stake sales; eyes on corporate NPAs

NEW DELHI: One-off gains from stake sales in ICICI Lombard and ICICI Prudential Life will give ICICI Bank's June quarter results a lift on Saturday. Analysts said the private lender might utilise the funds in creating additional Covid-19-led provisioning. Accounting for that, they see a 55-60 per cent surge in profit for ICICI Bank on a 15-17 per cent rise in net interest income (NII).

ICICI Bank had in June sold 3.96 per cent stake in arm ICICI Lombard for Rs 2,250 crore while it sold 1.5 per cent stake in ICICI Prudential Life for Rs 840 crore.

Emkay Global expects the bank to log a 59.10 per cent rise in net profit at Rs 3,036.20 crore from Rs 1,908 crore in the year-ago quarter. It sees NII to rise 16.9 per cent to Rs 9,042.90 crore compared with Rs 7,737.40 crore in the same quarter last year. Net interest margin (NIM) is seen improving to 3.8 per cent from 3.6 per cent YoY.

"Slippages are expected to be lower sequentially due to moratorium, but the bank may recognise some corporate NPAs from the stress pool apart from elevated agri slippages," Emkay said.

Sharekhan said ICICI Bank could report a profit of Rs 3,108 crore, up 62.90 crore. This brokerage sees NII growing 15.6 per cent to Rs 8,943 crore.

"We expect strong pre-provision operating profit (PPOP) growth, due to higher income from part stake-sale in life and general insurance arms. Loan growth of 12 per cent YoY and stable NIM. The pace of reduction in NPAs is expected to continue, with write-offs and contained slippages. Credit costs are likely to remain stable QoQ," Sharekhan said.

Meanwhile, BOBCAPS expects ICICI Bank to report a loan growth to 7-8 per cent YoY but steady NIM may drive 14 per cent YoY growth in NII, it said.

"Unlike Q4 where the bank witnessed one-off slippages from foreign accounts, we do not foresee such slippages this quarter," said Edelweiss Securities, which expects a marginal decline in advances and a flattish deposit growth on a sequential basis.