Domestic brokerage firm ICICI Direct Research anticipates steady slippages and resolutions of a few stressed assets, resulting in a stable credit cost, and continued robust credit offtake. Steadily high margins on the back of yield repricing offset the higher cost of deposits in Q4FY23.
It is anticipated that all lenders will maintain positive operational performance. According to the brokerage, PSU banks are expected to maintain their strong earning trajectory.
According to Bank’s Move
Further, management commentary on segments will drive advanced growth, liabilities, and margin trajectory in the face of rising costs of funds.
The fag end of the financial year, solid for the monetary business, is supposed to proceed with a foothold in retail credit interest.
Additionally, MSMEs are requesting working capital limits from banks. However, industry credit ought to continue to improve gradually. The brokerage asserts that the margin trajectory and liabilities accretion strategy drive valuation.
According to the most recent RBI fortnightly data, the banking sector experienced YoY growth of 15.7%, indicating that credit intake remained resilient. As a result of healthy business growth and steady margins, NII is anticipated to grow 24% YoY. Private bank advances are expected to grow 17% YoY, and PSBs are likely to see healthy traction at 16% YoY.
