ICICI Bank Q1 profit seen up 3% on 18.5% loan growth
India’s second-largest private lender is expected to report modest profit growth for the June quarter, driven by robust loan expansion even as margins face seasonal pressure.
ICICI Bank’s board is meeting today to approve first-quarter earnings that are expected to show a modest year-on-year increase in net profit. Analysts at Motilal Oswal Financial Services project a 3.1% rise in net profit to ₹13,164 crore, up from ₹12,768 crore a year earlier. A slightly more conservative estimate from Systematix pegs the profit growth at 1.7%, reaching ₹12,980 crore.
The primary engine for the lender remains aggressive balance sheet expansion. Motilal Oswal forecasts loan growth of 18.5% year-on-year, buoyed by broad-based demand across gold loans, corporate credit, personal loans, and mortgages. To fund this lending, deposits are expected to grow 15.2% year-on-year. This momentum is translating into higher core income, with net interest income projected to climb 10.5% to ₹23,906 crore according to Motilal Oswal, or 9.6% to ₹23,720 crore per Systematix.
Despite top-line strength, underlying profitability metrics are facing notable constraints. Systematix estimates that pre-provisions operating profit will actually decline by 0.9% year-on-year to ₹18,585 crore. Net interest margins are likely to contract marginally on a seasonal basis. Adjusted NIMs are expected to remain largely flat quarter-on-quarter as the bank absorbs the impact of deposit repricing and interest reversals. Operating expenses are also anticipated to rise in the quarter due to salary provisions.
For investors, asset quality provides a crucial element of stability. Gross non-performing assets are projected to stay flat sequentially at 1.4%, with net NPAs holding steady at 0.3%. However, analysts do anticipate a sequential increase in loan slippages, largely attributed to predictable seasonal stress in Kisan Credit Card portfolios. Brokerages expect overall credit costs to remain steady, as asset recoveries will largely offset this agricultural slippage.
Beyond the quarterly earnings, the board will also consider revising its fund-raising limits for issuing bonds, notes, or offshore certificates of deposits in international markets. The stock has gained 8% over the past month and has rallied 16% over two years, capping a five-year run that has delivered returns of 118%.
