Banking Q3 Results Preview - Operating Trends Likely To Continue: ICICI Securities

ICICI Securities Reports

We see Q3 FY24 emulating recent trends in terms of healthy loan growth and moderation in net interest margin QoQ, leading to soft net interest income QoQ, while elevated opex should also keep Pre-provision operating profit muted QoQ.

On a QoQ/YoY basis, we estimate NII and profit after tax of private banks under our coverage (excluding Housing Development Finance Corporation Bank) to grow at ~2%/12% and ~3%/18%, respectively. While we see a less then 10 basis points QoQ uptick in NIM for HDFCB, State Bank of India will likely report ~0.9% return on assets for Q3 FY24 (versus 1% QoQ) burdened by higher opex and softer NIM.

Asset quality is likely to remain comfortable with gross non-performing assets, net non-performing assets and credit costs sustaining improvement.

However, we also notice that certain developments (detailed below) in the quarter could have a bearing on systemic credit/deposits growth and NIM trajectory in the medium term

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