Recent commentary has been healthy, with the bank reporting a 21% YoY increase in deposits and a 9% YoY increase in advances for the quarter.
Analysts said a further decline in the Special Mention Accounts (SMA) book would be a key thing to watch in the quarter. They believe it would also be interesting to monitor the progress of ARC, the vehicle the bank would use to liquidate its outstanding non-performing loans (NPLs).
Nirmal Bang Institutional Equities expects the bank to post a loss of Rs 867 crore for the quarter, even as it sees net interest income (NII) more than double to Rs 2,069.60 crore.
Kotak Securities expects the private lender to report a loss of Rs 356.50 crore. This brokerage sees net NII jump 89.9% YoY (or 6.2% QoQ) to Rs 1,873.30 crore in March 2022 quarter from Rs 986.70 crore rupees at the same period last year. Indeed, the base quarter had a negative impact on the derecognition of interest income.
NIM is seen at 3.2% versus 3.1% in the December quarter and 1.9% in the year-ago quarter.
“Trade momentum is expected to remain weak on loan growth (8% yoy), but deposit mobilization (21% yoy) continues to show strong momentum. Pressure on revenue growth could remain elevated. the nature of these slippages which are voluminous and the various planned waivers (restructuring, ECLGS, etc.),” Kotak said.
Emkay Global expects the bank to announce a loss of Rs 1,200 crore in the fourth quarter. “Slower growth, softer margins and higher cost of credit could lead the bank to heavy losses. Slippages remain high,” he said.
ICICI Securities said improving recovery trends, a reduced backlog pool and better recoveries and upgrades should support a gradual decline in gross non-performing assets. For the quarter, he sees gross NPAs at 14.7%, the same as the previous quarter.
It sees a profit for the quarter at Rs 170 crore compared to a profit of Rs 266.40 crore in the December quarter and Rs 3,787.70 crore in the prior year quarter. The NII is expected to grow by 70% to Rs 1,680 crore from Rs 986.70 crore in the same quarter last year.
ICICI Securities expects slippages to Rs 1,250 crore from Rs 1,418.60 crore in the December quarter and percent slips to 0.7% from 0.9% sequentially. It sees gross non-performing assets as a percentage of total advances at 14.7% versus 14.2% in the December quarter.