KRChoksey: Stable Asset Quality For Private Banks In Challenging Times Amid Moratorium 2
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Private Banks saw a weak performance in the quarter with slowdown in top line growth and contracting net interest margins.
Sequentially loan book declined except HDFC Bank whose loan book grew marginally. Loan disbursement for the quarter fell by 1.2% as April and May were completely shut with limited business activity.
On YoY basis loan book was up by 12.8% mainly driven by retail book. Only HDFC Bank was able to record growth of 20.9% in loan book while ICICI Bank and Axis Bank posted single digit YoY growth.
Kotak Mahindra Bank adopted more conservative approach on lending and loan book fell by 1.9% YoY / 7.2% QoQ.
Deposit mobilisation remained resilient despite slowdown, with Kotak Mahindra Bank having high current account and savings account (CASA) share.
Deposits grew 20.6% YoY and 2.1% QoQ; Term deposits as a share of CASA fell 109 basis points QoQ and grew 12 basis points YoY to 42.5%.
Kotak Bank was able to fetch more low-cost deposits YoY, which stood at 56.7% in Q1FY21. Excluding Kotak Bank, average CASA ratio stood at 41.2% in the coverage.
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