ICICI Bank Q1FY23 results preview: Strong loan momentum to continue, bad loan provisions to rise

ICICI Bank is likely to continue witnessing strong growth in loans as well as net profit as the private sector lender witnesses a bounce back in business.

ICICI Bank Q1FY23 results preview: Strong loan momentum to continue, bad loan provisions to rise
ICICI Bank Q1 results are due on July 23.

ICICI Bank is likely to continue witnessing strong growth in loans as well as net profit as the private sector lender witnesses a bounce back in business. However, bad loan provisions of the lender are projected to grow in the April-June quarter, over the previous one nudged by lower recoveries, analysts noted. ICICI Bank will report its fiscal first quarter results on July 23. So far this year, ICICI Bank’s stock price has soared 4.6% to now trade at Rs 799 per share. The share price is up nearly 18% since the middle of last month. 

Loan growth momentum to continue 

Analysts, across Dalal Street, believe ICICI Bank to report healthy growth in loans. “Sequential loan growth would be healthy due to strong organic trajectory coupled with the bank bouncing back from the impact of the third wave of Covid-19 in 4QFY22, which would somewhat offset the seasonal impact of a tepid first quarter of the financial year,” analysts at Yes Securities said. Aiding this growth in net profit will also be the ongoing momentum in retail loans.

Motilal Oswal analysts project 20.2% on-year growth in loans while those at Prabhudas Lilladher are estimating 18.6% growth. Credit costs are foreseen to remain stable. 

Net interest income rising

ICICI Bank’s net interest income is expected to grow in the first quarter, to reach more than Rs 13,100 crore. “Sequential NII growth would be healthy due to positive loan mix changes and yield on advances evolving higher at a faster pace than cost of deposits due to repricing of externally benchmarked loans, implying NIM expansion on a sequential basis,” Yes Securities said. 

Further, analysts expect the lender’s provisions to have risen in the April-June quarter over the January-March quarter. 

Profit projections, asset quality

Motilal Oswal has projected gross non-performing assets (NPA) to stand at 3.5% in the quarter under review and Net NPAs to be at 0.7%. GNPAs were 5.2% in the year-ago period while NNPAs were at 1.2%. Analysts at Prabhudas Lilladher have estimated GNPAs to be 3.51% and NNPAs at 0.72%. The provision coverage ratio of ICICI Bank is estimated to stay strong at 80%

  • Net profit is estimated by analysts at Prabhudas Lilladher to come at Rs 6,272 crore, a 36% jump. 
  • Motilal Oswal has pinned net profit projections at Rs 6,450 crore, a rise of 39.7% from a year ago period. 
  • Yes Securities said ICICI Bank could report a net profit of Rs 6,539 crore, 41.7% higher.
  • Edelweiss Securities have estimated a net profit of Rs 6,790 crore, a massive 47% jump from the same quarter last year. 

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