ICICI Bank Q3 Results Review - Another Strong Quarter; Contingent Provision Prudently Scaled Up: Motilal Oswal
ICICI Bank reported another strong quarter with inline earning despite making contingent provisions of Rs 15 billion.
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Motilal Oswal Report
ICICI Bank Ltd. reported another strong quarter with inline earnings (return on asset of 2.2%) despite making contingent provisions of Rs 15 billion and Rs 11.96 billion toward non-performing assets due to strict provisioning norms. Core pre-provision operating profit grew 32% YoY, while net interest margins expanded by 34 bps QoQ to 4.65%.
The asset quality performance was exemplary as the gross non-performing asset/net-non performing asset ratios and provision coverage ratio improved further. The bank now has a total contingency buffer of Rs 115 billion.
Business growth was strong and broad-based across retail and corporate segments. ICICI Bank continued to invest in tech and digital initiatives to further boost growth momentum.
With a floating-rate book of 70%, we think the bank is well placed to ride the rising interest rate environment. We estimate ICICI Bank to deliver return on asset/return on equity of 2.2%/17.0% in FY25.
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