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ICICI Bank likely to report 28.3% YoY fall in Q3 net profit to Rs 2,165 crore

Net interest income is expected to have grown to Rs 5,329 cr down 2.3% YoY for the quarter ended December 31 compared with Rs 5,453 cr in the last fiscal.

, ET Now|
Last Updated: Jan 31, 2017, 11.04 AM IST
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Net interest income or the difference between interest earned and interest paid is likely to fall by 2.3 per cent on a year-on-year basis.
Net interest income or the difference between interest earned and interest paid is likely to fall by 2.3 per cent on a year-on-year basis.
MUMBAI: ICICI Bank which is scheduled to report its results for the quarter ended December on Tuesday may report 28.3 per cent year-on-year (YoY) drop in the net profit to Rs 2,165 crore, according to a poll conducted by ET Now.

The second largest private sector bank as per Market capitalization reported a net profit of Rs 3,018 crore in the corresponding quarter of last fiscal. This also includes a one-time income of stake sale in Life Insurance biz.

The profits are likely to be under pressure due to high provisions, muted Net Interest Income (NII) and also due to a higher base of last year. Net interest income or the difference between interest earned and interest paid is likely at 5,329cr and will fall by 2.3 per cent YoY.

The bank has a high exposure due to the stressed corporate sector and Asset quality which is the key monitorable is likely to remain under stress, but hopefully the incremental stress may stabilize. Slippages may remain high and analysts expect slippages worth Rs 7,500 cr to Rs 8,000 cr during Q3 versus a similar Rs 8, 000 cr slippages in Q2 last quarter.

Watchlist accounts stood at `32,490 cr as of Q2 and slippages from this watchlist will be key monitorable. As of H1 FY17 slippages from watchlist have been at `9,114 cr and total Restructured account book stood at Rs 6,336 crore.

The Contraction in Net Interest income growth is due to muted loan growth of 5-6% on account of demonetization impact. Margins may also come under pressure slightly on QOQ basis partly on account of interest reversals and partly due to Note ban impact.

Fee income growth will remain muted due to lower corporate fee income. However, High trading gains will support overall profitability.

Factors to Watch:

NPA trend, Slippages from watch list of Rs 32,490 crore as of Q2

Impact of note ban on growth, NIMs, NPAs, Corporate NPAs

Outlook on growth, any stake sale in other business ventures

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