ICICI Bank Q4FY22 Preview: NII seen at Rs126.6 billion, PAT at Rs64.4 billion

21 Apr 2022 , 12:52 PM

Result date: 23^rd April, 2022
Recommendation: Buy
Target price: Rs1,000

ICICI Bank is likely to post a good show for the March 2022 quarter. Loan growth is pegged at 17-18% over the year-ago quarter. Its robust growth in SME and retail segments is driven by continued investments in technology and partnerships with new players. This could drive a 21% yoy growth in Net Interest Income (NII). The bank’s non-interest income could also grow at a healthy pace of 22% as compared to the year-ago quarter.

A key highlight of this quarter will be continued moderation in slippages as well as credit costs for the bank, amid higher recoveries. This improvement should reflect in key bad loan ratios. Notably, the bank has bridged the asset quality gap relative to HDFC Bank significantly — a fact appreciated by prominent investors.

The bank’s net interest margins are likely to remain stable amid low funding costs and rationalization of operating expenses. A sharp 37% reduction in provisions as compared to the year-ago quarter will aid growth in Profit After Tax (PAT) for the bank. Consequently, PAT is likely to grow at almost double the pace of growth in total income during the quarter.

Important management insights to watch out for:

• Trends in asset quality
• Outlook on net interest margin
• Details around upcoming fund raising

Rs Billion	March 2022 estimates	QoQ change	YoY change
Net Interest Income (NII)	126.6	3%	21%
Pre-Provisioning Operating Profit	102.6	1%	20%
Profit After Tax (PAT)	64.4	4%	46%

Source: IIFL Research