Almost all analysts expect credit growth to exceed 12% for the banking system, which is primarily driven by private banks. The Net Interest Margin (NIM) can also go above 3% due to better net interest income and upward interest rate cycle.
Other earnings may decline 27% sequentially, driven by Treasury losses and lower fees, which are offset by lower OPEX.
Gaurav Jani, Research Analyst, Prabhudas Lilladher, said, “The net banking profit after tax (PAT) may see an 11.5% QoQ decline; the key monitorable margin outlook will be guidance on deposit accretion and treasury losses for some banks.”
Frontline banks are expected to report strong PAT growth, while PAT may see a marginal decline and NIMs are expected to remain range bound. can continue to improve credit enhancement Although PAT can reduce QoQ. can keep his loan Retail continues to gain traction as growth momentum while Axis margins are expected to improve.
“We believe that better credit growth, coupled with rising interest rates, should be margin positive for banks that have a higher stake in the floating rate book, including mortgages,” said analyst Anand Dama.
, “Furthermore, with asset quality improving, the risk of a new NPA cycle remaining low, should lead to healthy profitability and return ratios for banks. Valuations have also improved significantly, which is a measure of safety. Provides margin.”
Overall slippages, recoveries and provisions may moderate sequentially while gross bad debts may decrease. Analysts expect the overall GNPA ratio to decline by 20 basis points sequentially to 5.2% in the June quarter, reflecting lower EMI bounce rate at 22%, better recovery trends in retail and sitting on additional provisions Banks with high w-offs. ,
Kajal Gandhi said, “With the confidence shown by the management, the asset quality is expected to decline as the collection activity shows an improving trend.”
, “The stress behavior in the MSME segment needs to be monitored as rising interest rates and the end of the moratorium may create pressure.”