Private Banks’ Profit to increase

Private Banks

Good news from banks is that consequent upon increase in their operating performance and lower slippages of loans to bad category for the quarter ended June 2019 has resulted in an increase in their Net Interest Income by 20% as per reports.

  1. Recent study of Kotak Institutional Equities had revealed that banks may end up in an increased operating performance coupled with risks due to one offs during the quarter, like merged financials reported for merger of Dena Bank and Vijaya Bank with Bank of Baroda and IndusInd Bank with Bharat Financial Inclusion.
  2. Possibly Banks would also would end up in a low Interest base structure, due to Bhushan Steels’s sale had come in the income figure of corresponding quarter last FY 2019.
  3. Also a drop in interest rate could increase their treasury income.
  4. Though the resolution through Insolvency and Bankruptcy Code work has been slow, Gross and NPA ratios are likely to come down
  5. There are concerns over loan growth due to slackness in retail lending especially in the area of unsecured loans where loan inquiries have considerably come down.
  6. During the June 2019 loan growth has been in the range of 12-13% y-o-y
  7. NBFCs had a difficult June quarter, in terms of growth and there was a sharp decline in vehicle sales and a delay in the Government spending.
  8. Home financiers may find it difficult since Home Loans are likely to take a hit.
  9. A careful watch is being maintained on Growth and liquidity and also loan quality on the Developer Loan segment.
  10. Delinquency in respect of Consumer loan shows that NBFC are leading in the Delinquency levels in almost all sub-segments of Consumer Loans while applying the normal Delinquency norm of 90 Days Past Due (DPD) as per the report of Edelweiss Securities.
  11. The entire process predicts that the Profit of Private Sector Banks might increase in the coming days.

Author: Admin Bankedge

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