Banks Q3 Preview: Favourable Quarter For Earnings, Says Prabhudas Lilladher

Banks Q3 Preview: Favourable Quarter For Earnings, Says Prabhudas Lilladher

A customer holds a bundle of Indian rupee banknotes while filling in a deposit form at a branch of the HDFC Bank Ltd. in Mumbai, India. (Photographer Dhiraj Singh/Bloomberg)

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Prabhudas Lilladher Report

Banks earnings will be strong on continued double digit net interest income growth and relatively lower provisioning, while opex revival and moderate fee/treasury income will keep pre-provision operating profit slower.

The Supreme Court has not lifted its direction on non-performing asset recognition, hence we will see another quarter of low slippages, relatively lower recovery but higher write-offs which will augur well for NPA ratios.

Focus this quarter will be on three areas -

  1. loan restructuring outcomes (negligible restructuring has been the narrative)
  2. pro-forma slippages because of a full billing based quarter and
  3. collection efficiency of loans.

Click on the attachment to read the full report:

Prabhudas Lilladher Banks Q3 Earnings Preview.pdf
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