ICICI Bank Q2 Results Preview: Net profit likely to soar 26% driven by double-digit loan growth, steady asset quality

ICICI Bank, the country's second largest private sector lender, is scheduled to report its financial results for the July-September period on October 21.

ICICI Bank is scheduled to report its quarterly numbers on October 21. | Image: ICICIBank.com

As the earnings season gathers steam on Dalal Street, ICICI Bank, the country's second largest private sector lender by sales as well as market value, will report its quarterly financial results on Saturday, October 21. Analysts expect the bank to stage a strong performance for the July-September period (Q2 FY24) driven by double-digit growth in loans and deposits amid steady asset quality.

According to Zee Business research, ICICI Bank is likely to report a standalone net profit of Rs 9,530 crore for the second quarter of the current financial year, which translates into an increase of 26.1 per cent compared with the corresponding period a year ago. The analysts peg the lender's quarterly net interest income (NII), or the difference between the interest earned and the interest paid, to grow 23.4 per cent on a year-on-year basis to Rs 18,250 crore.

The banking behemoth is estimated to register a net interest margin (NIM), a key measure of profitability for financial institutions, of 4.6-4.7 per cent for the second quarter of the current financial year, as against 4.78 per cent for the previous three months, according to the research.

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Zee Business analysts peg ICICI Bank's growth in loans and deposits at 16-17 per cent and 16 per cent, respectively.

The bank is widely expected to register growth across segments though some analysts warn that margin pressure may persist for its business owing to a higher cost of funds.

ICICI Bank is likely to maintain its asset quality sequentially. Its gross non-performing assets (GNPAs), or gross bad loans, are estimated to be at 2.76 per cent and net non-performing assets (NNPAs) at 0.48 per cent of total loans for the July-September period, according to Zee Business research.

According to brokerage Sharekhan, which has ICICI Bank among its three top picks from the largecap banking space, the lender is estimated to log a pre-provision operating profit (PPOP) of Rs 13,991 crore for the quarter ended September 30, a 19.8 per cent increase compared with the year-ago period. PPOP is the income that a lender earns before taking into account the amount of money set aside as provisions towards bad loans.

The brokerage has a 'buy' call on ICICI Bank with a price target of Rs 1,200, which implies an upside of 28.7 per cent in the stock as of October 20.

How ICICI Bank fared in the June quarter (Q1 FY24)

The lender began the financial year with a robust performance in the first three months.

ICICI Bank's standalone net profit grew 39.7 per cent to Rs 9,648.2 crore while its NII expanded 38 per cent to Rs 18,226.5 crore for the three months to June 30, according to a regulatory filing.

The lender clocked a net interest margin of 4.78 per cent for the June quarter.

With those quarterly numbers, ICICI Bank beat market expectations on all fronts with 20.6 per cent loan growth and steady asset quality.

Zee Business analysts had pegged its net profit at Rs 9,160 crore, NII at Rs 17,780 crore and NIM at 4.8 per cent for the April-June period.

ICICI Bank shares: Past performance

The lender's stock—traded with the symbol ICICIBANK—finished the September quarter with a gain of 1.9 per cent, in line with a 2.4 per cent rise in the headline Nifty50 index and better than a 0.4 per cent decline in the high-beta Nifty Bank gauge.

As of October 20, the ICICI Bank stock had grown three per cent in the past year, underperforming gains of 11.2 per cent and 7.2 per cent in the Nifty and Nifty Bank indices, respectively.

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