ICICI Bank Hits Record High as Q3 Profits Surpass Estimates

In a noteworthy development, shares of India’s ICICI Bank reached a record 1,059.4 rupees on Tuesday following better-than-expected third-quarter profits driven by robust loan growth. The private lender’s shares surged up to 5%, standing out as the sole gainer on the Nifty Bank index, which saw a 0.7% decline.

ICICI’s performance sharply contrasts with that of its larger rival, HDFC Bank, which witnessed a nearly 14% decline in shares over the past five sessions. HDFC Bank faced challenges as margins dipped due to increased deposit costs and heightened competition.

Macquarie Capital highlighted that ICICI Bank now holds a 15% premium to HDFC Bank based on core price-to-book value.

Despite a marginal dip of 10 basis points in net interest margin (NIM) to 4.43% from the previous quarter, ICICI Bank remains resilient. Analysts at Elara Capital noted that, unlike some frontline peers, ICICI Bank may not experience an aggressive NIM dip, emphasizing the bank’s potential to withstand challenges and maintain steady earnings.

Indian lenders, experiencing consistent double-digit loan growth due to heightened demand, grapple with squeezed margins from rising deposit costs. ICICI Bank reported a record-high standalone net profit of 102.72 billion rupees ($1.24 billion) in October-December, surpassing analysts’ expectations of 100.25 billion rupees. The bank’s total loans recorded an 18.8% growth from the previous year, primarily driven by retail loans, with deposits growing at 18.7%.