ICICI Bank Ltd.’s strong quarterly earnings will help the private lender further reduce the valuation gap with market leader HDFC Bank Ltd., analysts said.
ICICI Bank on Saturday reported that its net profit for the quarter ended March 31 stood at Rs 7,019 crore, up 59% year-on-year. That was higher than Rs 6,402.5 crore estimated by analysts tracked by Bloomberg. Net interest income for the quarter rose 21% year-on-year to Rs 12,605 crore.
The bank also saw its net interest margin rise to an all-time high of 4% —now comparable to HDFC Bank’s.
While gross bad loan additions were slightly elevated on a sequential basis, better upgrades and recoveries ensured that the final figure was lower. Gross non-performing asset ratio for the bank improved by 53 basis points quarter-on-quarter to 3.6%.
With nearly every metric showing sustained improvement, analysts expect ICICI Bank’s return on equity and return on asset ratios to improve over the next two years, improving its valuations.
Here’s what the analysts said about ICICI Bank’s Q4 results: