Banking Sector Q3 Earnings Preview: A True Performance Test On Several Counts, Says ICICI Securities 
A HDFC Bank Ltd. teller counts Indian 100 rupee banknotes at a branch in Mumbai. Photographer: Dhiraj Singh/Bloomberg

Banking Sector Q3 Earnings Preview: A True Performance Test On Several Counts, Says ICICI Securities 

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

Q3 FY21 earnings for banking sector will be a true performance test on several counts - extent of stress recognition, downward net interest margin trajectory, normalisation of origination and collection and cost efficiency will differentiate players.

Key to watch out -

1. Financiers suggesting month-on-month improvement in collection efficiency and very low single digit restructuring - number print should echo this affirmative stance;

2. we expect stress recognition through actual slippages of 4-7%;

3. provisioning build-up (both on restructured and incremental stress) estimated at 2-4%;

4. interest income reversal and lower credit-deposit ratio will drag NIMs by approximately 15-20 basis points.

Click on the attachment to read the full report:

ICICI Securities Banking Q3FY21 Preview.pdf

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