ICICI Bank Q4FY22 Results Preview: Profit may surge up to 64% YoY, asset quality likely to improve

India’s second-largest private lender ICICI Bank is scheduled to report robust March quarter earnings for the financial year 2021-22 on Saturday. Several brokerages estimate the profit may grow up to 64 per cent year-on-year, while net interest margins (NII) may come in the range of 19-23 per cent. 

They also believe the asset quality of the private lender may improve marginally on expectations of slippages declining and net interest margins to come almost flat sequentially. 

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According to Kotak Institutional Equities, ICICI Bank may report around 64 per cent growth in its profit after tax (PAT) to Rs 7215.9 crore YoY, while its NII may see a jump of almost 20 per cent to Rs 12,463.4 crore YoY in March-end quarter of FY22. 

The brokerage expects provisions to come down to 1 per cent of loans as there is a negligible risk on asset quality currently and building slippages of around 1.8 per cent (Rs 37 billion). A solid commentary on recovery points to continuation in lower stress coming from asset quality perspective. 

“We expect a PPoP growth of around 20 per cent YoY. Loan growth to be stable at around 15 per cent led by SMEs. We expect all banks, including ICICI Bank, to start sounding cautious on NIM as competitive intensity has increased sharply,” Kotak Institutional Equities said. 

While YES Securities sees over 51 per cent and 23 per cent YoY growth in PAT and NII to Rs 6646 crore and Rs 12,841.3 crore in Q4FY22.  

Slippages should decline sequentially due to underlying factors. Net interest margin should be higher on a sequential basis due to loan mix changes, with gold loans driving this, the brokerage said.  

It added that fee income would move up broadly in line with loan growth and treasury profit would be subdued due to the rise in bond yields as well as provisions would be higher sequentially. 

Lower than the previous two brokerages, Axis Securities see the profit of ICICI Bank growing over 46 per cent to Rs 4403 crore, while NII is expected to jump over 22 per cent YoY to Rs 10,431 crore in fourth quarter of the financial year 2021-22.  

The brokerage said, “ICICI Bank’s overall loan growth to remain strong YoY. NII growth to be supported by healthy loan growth and stable NIM (net interest margin). Credit costs to taper to near normalised levels. Moderation in slippages along with higher recoveries to aid asset quality.”