Prominent private sector banks will be declaring their results for the first quarter of FY24 today. Analysts have been speculating a mixed set of numbers for the lenders.
With strong loan growth across segments, ICICI Bank is likely to report a significant hike in net profit.
Read More: RBI Relaxes Condition For Onboarding Of New Customers By HDFC Credila
The private sector lender’s net profit for the June quarter is expected to be around Rs 9,000 crore. The private lender had reported a net profit for Rs 6,904.9 crore in the first quarter of last fiscal.
Sequentially, the net profit growth is seen flat, and net interest income up just 1 per cent, as per analysts.
Margins are likely to moderate by 15 bps QoQ to 4.73% as funding costs rise.
“Margins will be impacted by seasonal factors. Note that Q1 has fewer days than Q4 and therefore annualised computation results in slightly lower margins,” Morgan Stanley said.
ICICI Bank’s loan growth is expected to remain at 18 per cent YoY, mainly due to Retail and SME segments. The bank has played an effective role in the SME and Retail segments, aided by continued investments in technology and partnerships with new ecosystem players.
“Expect PPoP or pre-provision operating profit to grow at 30% YoY, as most operating metrics remain stable to marginally negative. Loan growth likely to be healthy at 18%, led by healthy contributions from all segments. The rate cycle is no longer favorable for NIM expansion, and therefore, building in 27 bps QoQ contraction in NIM,” said Kotak Institutional Equities in its report.
On Friday, the shares of ICICI Bank closed at Rs 1,000.45, after rising 0.47 per cent in the day. Its shares have rallied 13.4 per cent so far this fiscal 2023-24 (FY24), as against 15 per cent rise in the benchmark Nifty50 index and 13.7 per cent gain in the Nifty Bank index.
YES Bank
YES Bank is likely to report a comparatively mixed set of numbers in the given quarter on the back of slow business growth. Besides, there is much divergence for the bottomline of the bank, considering the higher cost of funds.
Analysts are expecting YES Bank to report a growth in net interest income (NIIs) on a year-on-year (YoY) basis, while its quarter-on-quarter numbers (QoQ) may remain subdued. Net interest margins (NIMs) are likely to contract by 10 basis points (bps) on a sequential basis, with core pre-provisioning operating profit (PPOP) is seen arounds Rs 700-730 crore.
Read More: Swaminathan Janakiraman takes over as new Deputy Governor of RBI
Kotak Institutional Equities said YES Bank’s NII to grow 6 per cent YoY reflecting the weak underlying business growth. Business momentum is gaining traction across retail and MSME segments but overall loan growth will be lower than industry average at 8 per cent YoY.
“We expect NIM at 2.8 per cent, but there is likely to be a lot of volatility given the nature of income,” it said.
Kotak expects NIIs at Rs 1,969 croore, up 6 per cent YoY and down 6 per cent QoQ. PPOP is seen at Rs 729 crore, up 24 per cent YoY but down 18 per cent QoQ. The brokerage pegs PAT at 299 crore, up 48 per cent QoQ, but down 4 per cent YoY.
Kotak expects Yes Bank‘s net profit to decline four per cent to Rs 298 crore in the quarter-under-review.
Yes Bank shares surged ahead of Q1 results 2023 in anticipation that the private lender may lower provisioning. On Friday, the bank stock closed trading Rs 18.05, up 1.98 per cent in the intraday trade.
Kotak Mahindra Bank
Kotak Mahindra Bank is expected to report high double-digit growth in net profit this quarter on the back of healthy loan growth is likely to help report. However, net interest margins are expected to slide amid rising cost of funds. Its net interest margin (NIM) – a key measure of profitability – stood at 5.75 per cent at the end of March 2023.
Kotak Mahindra Bank had reported a standalone net profit of Rs 2,071.15 crore in Q1 FY23.
This quarter, analysts are expecting the bank to report a net interest income (NII) of Rs 6,207 crore, and a profit after tax (PAT) of Rs. 2,124 crore.
Read More: Liquor Sales Rise By 14% In FY 2022-23, Premium Alcohol Sales Increased By 48%
The shares of Kotak Mahindra Bank closed at Rs 1967.40 on July 21, 2023, up 0.67 per cent from the previous day’s close of Rs 1957.
