The bank, which was in the news recently following the resignation of its part-time Chairman and independent director Atanu Chakraborty, is likely to report a Net interest income (NII) at Rs 33,400- Rs 34,100 crore, according to estimates given by four brokerages, who see a growth of 4-6% YoY in the reporting quarter.
Estimates of Nomura, Kotak Institutional Equities, ICICI Securities and Nuvama Institutional Equities have been taken into account.
The earnings will be supported by healthy deposit growth and stable operating trends, though the margin could see a compression.
Investors should watch out for NIM’s trajectory, commentary on the Chairman’s exit and loan growth vis-a-vis the deposits.
Here’s what estimates say on these key metrics:
1) PAT
– Nomura estimates stand at around Rs 18,900 crore, up 7% YoY and 1% QoQ.– Nuvama expects PAT at Rs 19,320 crore, up 9.7% YoY and 3.6% QoQ.
– Kotak Securities pegs PAT at Rs 19,366 crore, up 10% YoY and 4% QoQ, the most optimistic among peers.
– ICICI Securities estimates PAT at Rs 18,695 crore, up 6.1% YoY and 0.2% QoQ.
2) NII
– Nomura suggests NII at Rs 33,400 crore, up 4% YoY and 2% QoQ.
– Nuvama estimates NII at Rs 34,100 crore, up 6.3% YoY and 4.6% QoQ.
– Kotak Securities expects NII at Rs 33,802 crore, up 5% YoY and 4% QoQ.
– ICICI Securities pegs NII at Rs 33,429 crore, up 4.3% YoY and 2.5% QoQ.
3) Pre-Provision Operating Profit (PPoP)
– ICICI Securities expects PPoP at Rs 28,587 crore, up 7.7% YoY and 5.5% QoQ.
– Kotak Securities estimates PPoP of Rs 28,373 crore, up 7% YoY and 5% QoQ.
– Nuvama sees PPoP at Rs 28,180 crore, up 6.2% YoY and 4% QoQ.
– Nomura pegs PPoP at around Rs 28,250 crore, up 6% YoY and 4% QoQ.
4) Net Interest Margins (NIMs)
– ICICI Securities expects NIMs at 3.47%, down 26 bps YoY and 4 bps QoQ.
– Nuvama estimates NIMs at 3.36%, down 18 bps YoY and 1 bp QoQ.
– Kotak Securities pegs NIMs at 3.4%, down 10 bps YoY and flat QoQ.
– Street view suggests NIMs at around 3.4%, down 18 bps YoY and 4 bps QoQ, with pressure from repo rate transmission, partly offset by term deposit repricing and CRR cut.
5) Loans & deposits
– ICICI Securities estimates advances at Rs 29.6 lakh crore, up 13% YoY and 4.9% QoQ.
– Nuvama also sees loans at Rs 29.6 lakh crore, up 13% YoY and 4.9% QoQ, while deposits are pegged at Rs 31.05 lakh crore, up 14.4% YoY and 8.6% QoQ.
– Nomura estimates suggest loans at Rs 29.3 lakh crore (12% YoY, 4% QoQ) and deposits at Rs 31.05 lakh crore (14% YoY, 9% QoQ).
– Brokerages note that while deposit growth remains strong, loan growth continues to trail system credit growth.
6) Asset quality
– ICICI Securities estimates slippages at Rs 7,745 crore, down 3.3% YoY and 9.9% QoQ.
– Nuvama expects slippages at Rs 8,300 crore, up 10.7% YoY but down 3.5% QoQ, and provisions at Rs 2,990 crore (-6.4% YoY, +5.3% QoQ).
– Nomura estimates provisions at Rs 3,210 crore, up 1% YoY and 13% QoQ.
7) Credit cost
– Nomura estimates place credit cost at around 0.4%, down 5 bps YoY but up 4 bps QoQ.
8) Key monitorables
– Trajectory of NIMs amid rate cycle changes
– Loan vs deposit growth gap
– Liquidity (LCR) trends in Q4
– Management commentary post Chairman exit
– Sustainability of asset quality and credit costs
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)