India Banks Q3 Earnings Preview - Profitability Metrics On Track: Dolat Capital
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.
Dolat Capital Report
Banking sector’s profitability metrics expected to improve in Q3 FY22 as credit costs moderate and loan growth strengthens. We build in net interest income and pre-provision operating profit growth of 12% and 7% YoY respectively for coverage banks.
Profit after tax growth at 42% YoY will be driven by public sector banks with sharp decline in their credit costs. Sequential NII growth of 5% QoQ is owing to pick up in advances growth and lower interest reversals, despite some pressure on spreads.
While low treasury gains and rising opex will have bearing on PPoP profile, profitability metrics benefit from decline in credit costs across banks as restructurings recede and slippages moderate.
Behavior of Emergency Credit Line Guarantee Scheme loans coming out of principal moratorium will be a monitorable.
Click on the attachment to read the full report:
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.