Banking Sector Update - Concurrent Indicators Imply Margin Contraction
For Private Banks: Systematix
A cashier examines Indian rupee banknotes. (Photographer: Dhiraj Singh/Bloomberg)

Banking Sector Update - Concurrent Indicators Imply Margin Contraction For Private Banks: Systematix

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.

Systematix Research Report

It is apparent from April 2021 marginal cost of funds based lending rate data that private banks have taken a conservative stance in the wake of the second Covid-19 wave.

There has been a drop in lending rates (fresh loans and outstanding loans).

However, public sector banks data points reflect otherwise.

Credit volume data points reveal stagnant credit card receivable outstanding (at Rs 1.1 trillion) for a couple of months.

Jewelry/gold loan book witnessed strong traction.

Private banks’ dominant position in the credit card segment and public sector banks’ inclination in jewelry/gold loans explains the variation in weighted average lending rate trajectories.

Click on the attachment to read the full report:

Systematix Concurrent indicators imply margin contraction for private banks.pdf

DISCLAIMER

This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BloombergQuint.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.