Most PSU banks likely to report strong loan growth driven by Retail, Agri and MSMEs: Nuvama
New Delhi [India] 23 September (Memorial): Even if corporate credit growth continues to be suppressed, Nuvama is expected to publish a solid credit growth for retail, agriculture and MSME segments in the next quarter, according to a sector update of corporate stocks.
In the report, although the request for corporate loan was largely increased by investment funds and capital markets, it is likely that loans for retail, agriculture and MSME will inform a strong credit growth.
“Most PSU banks are likely to report the strong credit growth directed by RAM (Retail, Agriculture and MSME). Corporate credit growth is separated by investment funds and capital markets, while the AAA pockets reported institutional growth.” He noted the report
Among the leading lenders, Bank of Bar Association (BOB) directed the three -month credit growth of about 4 percent, Punjab National Bank (PNB), Canara Bank and Indian Bank and Indian Bank expected about 2.5 percent growth.
The Indian State Bank (SBI) is expected to grow close to 3 percent, and the Indian Union Bank will be behind the sector averages.
In the edge cavities, the appearance shows a moderate decrease. While PNB directly directs straight net interest margins (NIM), the Bob expects NIM to remain constant, but the nucleus may shift seven basis points. The Indian Bank’s margins may fall below 10 basis points, while Union Bank is likely to see a narrowing of a 6 -base point.
Canara Bank may witness higher pressure from the sector due to low current and savings account (CASA) rates. The SBI has decreased five basic points in margins.
However, despite these pressures, the quality of assets in the state banks is expected to remain stable without a great shift. While SBI, Bob and Indian Bank’s shift rates have improved, other lenders are expected to be kept constant.
“The quality of assets for state banks will remain healthy without shift. SBI, BOB and Indian bank will decrease and flattened for others.” He noted the report.
The report also emphasizes that sustainability of assets (ROA) continues to be an investor concern of sustainability of more than 1 percent, but key banks are positioned to obtain this criterion. While the SBI and Bob are expected to keep Roa over 1 percent supported by stronger core income, PNB can see an expansion in RoA due to a lower tax output.
Nuvama research also stressed that the PSU Bank index has performed about 15 percent better than the private bank index in the last six months due to stronger credit growth and asset quality performance.
On the income front, net interest income (NII) growth for both government and private banks is under pressure. While the NII growth for PSBs remained negative in the first quarter of 26 financial years from a year, most private sector banks that block HDFC Bank and Icıcı Bank managed only low -digit growth. (MOMENT)
