Banks, Financial Sector Q1 Review - Asset Quality Impact Transient; Life Insurance Growth Strong: Nirmal Bang
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Nirmal Bang Report
For banking sector asset quality impact seen in Q1 FY22 will be transient in nature and we should see improvement from Q3 FY22 onwards. As we speak, recoveries and collections are already on the mend.
Coverage banks’ credit costs were down ~20 basis points QoQ on the back of strong provisioning buffers created over the last four to five quarters.
Disbursements for housing finance companies increased by ~96% YoY, largely aided by a low base. Sequentially, disbursements were down 60.3% QoQ.
With the demand trends staying favorable, disbursements have seen a rebound since easing of lockdown restrictions.
For life insurance companies strong demand trends for annuity and guaranteed products led to strong growth for non-linked savings products.
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