ICICI Bank Q2 Preview: Growth likely subdued by weak interest income and loan performance

ICICI Bank is set to report its second-quarter results for FY25 on October 26, with market expectations indicating mid-single-digit growth in net profit.

Zee Business analysts say, is likely impacted by soft interest income and moderate loan growth, alongside a relatively stable cost-to-deposit (C/D) ratio.

For the quarter ended September 30, 2024, the bank's Net Interest Income (NII) is expected to see a modest increase of 8.9 per cent year-on-year, rising to Rs 19,932 crore from Rs 18,308 crore in the same period last year.

However, despite the growth, analysts highlight that NII expansion is likely constrained by a relatively weak interest income environment.

ICICI Bank’s net interest margin (NIM) is forecasted to remain stable, supported by strong fee income. This steady margin performance is expected to bolster overall earnings despite pressures on loan growth. Additionally, the bank’s C/D ratio, a critical measure of financial stability, is anticipated to stay consistent with the previous quarters, reflecting prudent financial management amidst challenging conditions.

In terms of asset quality, ICICI Bank is expected to report Gross Non-Performing Assets (GNPA) at 2.3 per cent, a slight increase from 2.2 per cent quarter-on-quarter, while Net Non-Performing Assets (NNPA) may increase from 0.4 per cent to 0.5 per cent over the same period. The performance of the bank’s unsecured loan book is also under scrutiny, as its resilience during this period is expected to play a key role in the overall asset quality and profitability outlook.

Key monitorables

Key aspects to monitor during ICICI Bank’s Q2 results are its deposit growth and margin outlook, both crucial to assessing the bank's longer-term growth trajectory.

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