India Banks Q1 Earnings Preview - Operating Metrics Likely To Be Muted: Dolat Capital
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Dolat Capital Report
Operating metrics are likely to be muted in Q1 FY22 led by seasonally weak loan growth, no one-offs in the form of treasury gains/large recovery, and normalisation in operating expenses versus Q1 FY21.
Consequently, we expect net interest income and pre provision operating profit growth of 10% and 1.5% YoY for banks under coverage.
Net interest margin could however improve sequentially across several banks led by a low base (large interest reversal in Q4 FY21) and continued improvement in cost of fund.
Slippages should remain elevated and one could see rise in restructuring post the second wave, especially from the micro, small and medium enterprise and retail segments.
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