Banks Q3 Preview: Favourable Quarter For Earnings, Says Prabhudas Lilladher
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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 -
- loan restructuring outcomes (negligible restructuring has been the narrative)
- pro-forma slippages because of a full billing based quarter and
- collection efficiency of loans.
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