BFSI Sector Check - Covid-19 Wave Left Behind, Fintech Wave Ahead: ICICI Direct
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ICICI Direct Report
The banking sector had seen a sharp decline in business activity owing to lockdowns, especially in April, May 2021.
However, trends from July 2021 onwards show faster return towards normalisation, especially on the asset quality front.
Most lenders have indicated at an improvement in collections with unlocking of the economy. However, loan growth has not seen a meaningful improvement and has been hovering in the ~6-6.5% range.
This is mainly on account of large industries remaining a drag (owing to deleveraging and subdued capex) while retail and agri loans have shown continued better traction.
We believe that increasing advent of fintech players is expected to broaden the market size by targeting unserved and under-served population through digital means.
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