Big banking Q4 earnings are due in a short while from now. The country’s largest private sector banks, HDFC Bank and ICICI Bank are set declare their results for for the fourth quarter. The big focus will be on how the banks’ performed on the NII, NIMs as well as look into the overall asset growth in this current quarter. Another big factor to watch would be future projections from the banks.
HDFC Bank Q4 preview
HDFC Bank is set to announce dividend and Q4 results. Most brokerages expect the bank to report moderate net interest income (NIIs) growth. The profitability is also expected to be flat to moderate on both sequential and annual basis. Margins for HDFC Bank NIMs may contract marginally, while net profit may come in around Rs 17,000 crore for the fourth quarter of FY25.
According to Motilal Oswal, “NIMs are likely to have a downward bias in the near-term” on the back of slower growth and the brokerage expects overall banking earnings to bottom-out in FY26 . Credit growth is another key factor to watch and Motilal Oswal sees it “sustaining at approximately 12% YoY in FY26.”
The other key brokerage, Nuvama Institutional Equities also expects loan growth and deposits to remain soft in Q4. The big positive according to them is the improvement in system liquidity as a resul of RBI’s recent injections. NIMs, as per Nuvama, may see slippages by 2-5 bps.
ICICI Bank Q4 preview
The country’s second largest private sector bank, ICICI Bank is set to post low double digit profit in Q4, as per most brokerage estimates. Margins for the bank are also expected to be healthy and bank is seen benefitting from the CRR cut undertaken by RBI. The bank however, may report sequential decline in slippages.
ICICI Bank, as per most brokerage reports, is set to report stable NIMs and encouraging credit growth in Q4. However, experts don’t rule out some margin pressure as a result of the recent repo rate cut by the RBI. That said, the bank is also expected to clock healthy loan growth for the fourth quarter.
HDFC Bank, ICICI Bank share price between January-March
The banking sector has had a strong run through the last few months and between January and March, ICICI Bank shares ran up 5%, outperforming the benchmark Nifty. The Nifty in the same period had recorded a 2% decline. HDFC Bank also clocked about 1% gains in the same quarter. This performance is in sync with the overall steady growth seen in Bank Nifty and the whole list of bank sector stocks.