ICICI Bank Q4 Preview: Profit growth likely to be over 300% with double-digit increase in NII

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ICICI Bank, the country's second-largest private sector lender, is likely to report more than 300 per cent year-on-year (YoY) growth in profit for the quarter ended March 2021, aided by lower provisions, strong pre-provision operating profit (PPoP) and improved net interest income (NII). Sequentially, the bottomline growth could be led by lower credit cost.

The bank will announce its quarterly results on April 24. NII and PPoP could see double-digit growth, with stable net interest margin (NIM) for the March quarter.

"We expect strong pre-provision operating profit growth (up 19.2 per cent YoY) due to improved NII and advances traction. We expect loan growth to be at mid-teens, a stable NIM and largely stable asset quality. Credit costs are likely to trend down on a QoQ basis," said Sharekhan, which sees a 318 per cent YoY growth in profit and 14.3 per cent rise in NIM for the quarter.

The management commentary on asset quality and the lockdown impact will be keenly monitored.

Emkay Global also said a strong loan growth, NIM and continued provision claw-back should lead to healthy profitability. “Underlying asset quality trends, mainly in retail, should be good. Corporate stress may include Srei exposure,” it added.

ICICI Bank shares have rallied 8.3 per cent in CY21 so far and jumped 64 per cent in the last one year, outpacing the Bank Nifty that gained 1.7 per cent and 57 per cent, respectively.

“We expect provisions to slide to normalised levels and the bank is likely to use some of the COVID provisions in the early part of this quarter. We are building in slippages of 4 per cent but we see strong commentary on recovery to normalised levels of the loan book from an asset quality perspective," said Kotak Institutional Equities, which sees a 313.5 per cent YoY growth in profit and 13.7 per cent rise in NII for the quarter.

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