The bank is expected to report strong performance in Q4 with double-digit growth in profitability and interest income, while credit costs are seen to moderate.
The bank's board of directors will consider and approve the financial performance ending March 31, 2022, and recommendation of dividend, if any, for the financial year FY22, on April 23.
Earlier this month, the bank had announced that the board will consider 'fundraising by way of issuance of debt securities including non-convertible debentures/bonds/notes/offshore certificate of deposits in single/multiple tranches in any currency through public/private placement' also on Saturday.
Ahead of the earnings, ICICI Bank shares traded in a bearish tone on Friday. The shares closed at ₹747.35 apiece down by 1.95% on BSE.
ICICI Bank is JM Financial's top pick amidst the fourth quarter and year-end earnings for FY22.
What to expect?
For Q4FY22, JM Financial expects ICICI Bank's net interest income (NII) at ₹13,451.1 crore up by 29% yoy and 9.9% qoq. Pre-provision operating profit (PPOP) is seen at ₹10,593.7 crore higher by 24.1% yoy and 4.4% qoq. Profit after tax (PAT) is expected at ₹6,314.3 crore up 43.4% yoy and 1.9% qoq.
JM Financial expects ICICI Bank to record credit growth of 18% yoy and deposit growth of 16% yoy. It expects credit and deposits to grow by over 6% on a sequential basis.
Credit costs of large banks are seen to moderate during Q4 with JM Financial expecting 0.80% for ICICI Bank from 1.06% in Q3FY22. Cost to Income trend for the bank is seen at 41% in Q4FY22 versus 41.1% in Q3FY22.
Overall, JM Financial expects the quarter to be strong for the banking industry as a whole and expects larger private banks to outperform. It added, "We expect the return metrics to improve driven by a) improving loan growth, b) stable NIMs, and c) moderation in credit costs. In terms of valuation, both private banks and PSU banks trade close to their LTA (8 years) multiple of 2.7x and 1.0x NTM P/BV respectively."
"We maintain our positive stance on large lenders and ICICI Bank and Axis Bank are our top picks in the sector," JM Financial said in its banking sector Q4FY22 preview report.
JM Financial has recommended a 'Buy' rating on ICICI Bank with a target price of ₹1,010 apiece.
Previous Quarter:
In Q3FY22, ICICI Bank posted a 23% yoy growth in the net interest income to ₹12,236 crore from ₹9,912 crore in Q3FY21. The net interest margin was 3.96% in Q3-2022 compared to 3.67% in Q3-2021 and 4.00% in the quarter ended September 30, 2021 (Q2-2022).
On a standalone basis, the profit after tax grew by 25% yoy to ₹6,194 crore in Q3FY22 from ₹4,940 crore in Q3FY21.
The net NPA ratio declined from 0.99% on September 30, 2021, to 0.85% on December 31, 2021, the lowest since March 31, 2014. Gross NPA was at 4.13% in Q3FY22 versus 4.38% in Q3FY21 and 4.82% in Q2FY22. The provision coverage ratio was 79.9% on December 31, 2021.
