Comments
Equirus
CMP: ₹331.65
Target: ₹410
ICICI Bank posted a below-expected 3QFY18 PAT of ₹1,650 crore (EE ₹1,870 crore) dragged by 13 bps q-o-q NIM compression, subdued non-treasury fee income growth of 2 per cent y-o-y and elevated provisions of ₹3,570 crore. Domestic loan growth was healthy at 16 per cent y-o-y with the bank focussing on granular retail and better-rated corporate lending; about 88 per cent of incremental corporate disbursements in 9MFY18 were to ‘A- and above’ rated corporates. With a moderation in incremental slippages, about ₹17,000 crore of NCLT-referred accounts likely reaching some resolution in FY19E, and good quality incremental disbursements, we expect continued moderation in incremental credit cost (ex. one-time impact of IND-AS) during FY19E/FY20E; this in turn would drive RoE improvement (FY20E 12 per cent vs FY18E 7.8 per cent).
Key risks: A protracted slowdown, non-resolution of stressed assets and adverse regulatory guidelines are key risks to our estimates. We have not incorporated any impact of IND-AS and one-time provisioning remains a key risk to our FY19E estimates.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.