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ICICI Bank Q1 preview: profit may jump due to stake sale

The country's second largest private sector lender ICICI Bank is expected to announce its first quarter result (ICICI bank quarterly results)on July 25.
Analysts see around 60 percent year-on-year jump in Q1FY21 profit as stake sale in life and general insurance companies for capital during the quarter is likely to lift pre-provision operating profit by around 50 percent YoY.
The bank had sold 3.96 percent stake in its subsidiary ICICI Lombard General Insurance for Rs 2,250 crore, and 1.5 percent stake in ICICI Bank Prudential Life Insurance for Rs 840 crore in June.
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"We expect the bank to utilize Rs 3,200 crore from one-off gains from the stake sale in ICICI Prudential and ICICI Lombard to make additional COVID-19 provisions taking it from current 0.4 percent to 1 percent," Emkay Global said.
Net interest income, the difference between interest earned and interest expended, is seen rising in the range of 13-17 percent with loan growth of 7-12 percent in Q1FY21 YoY.
"We expect a pre-provision operating profit growth of around 50 percent YoY led by higher income from part stake-sale in life and general insurance. Loan growth would slow to around 7 percent and healthy NII growth (13 percent YoY). NIM (core) would remain stable QoQ at 3.9 percent," said Kotak Institutional Equities which sees profit growth at around 64 percent YoY.