BENGALURU – Shares of ICICI Bank of India hit a record high of 1,059.4 rupees on Tuesday after its third-quarter profit beat estimates on robust loan growth and margins met expectations.
The private lender rose as much as 5% in the session and was the only stock posting gains on the Nifty Bank index, which fell 0.7%.
ICICI’s performance is in stark contrast to that of bigger rival HDFC Bank, whose shares have fallen nearly 14% over the past five sessions after margins eroded due to rising cost of deposits and intense competition.
Macquarie Capital said ICICI Bank is now at a 15% premium to HDFC Bank on a core price-to-book value basis.
Mumbai-based ICICI reported a 10 basis point decline in net interest margin (NIM) to 4.43% from the previous quarter.
“While NIM may be tight, ICICI Bank may not see an aggressive NIM decline, unlike some frontline peers,” analysts at Elara Capital said in a note.
“While banking may be facing stress, ICICI Bank can hold against the tide with steady earnings,” they said.
Indian lenders have consistently reported double-digit loan growth over the past few months due to increased demand. However, their margins have been squeezed by rising deposit costs.
ICICI reported a record high quarterly standalone net profit of 102.72 billion rupees ($1.24 billion) in October-December, compared with analysts’ expectations of 100.25 billion rupees, according to LSEG data.
The bank’s total loans grew 18.8% from the previous year, mainly led by retail loans, while deposits grew 18.7%.
($1 = 83.0920 Indian rupees) (Reporting by Nishit Navin in Bengaluru; Editing by Sonia Cheema and Dhanya Ann Thoppil)