Indian banks tend to report better credit growth rates and improve poor loan situations in the April-June quarter (Q1fy23) behind a wider pickup in macroeconomic activities and due to a relatively disrupted quarter, said the words. The bank is estimated to record more than 12 percent of credit growth in the year-to-year (Y-O-Y) base during Q1, they said.
Treasury losses, however, will continue to be Mar Bottom Line Bank because the lender is expected to report more than RS 10,000 Crore from the Mark-to-Market (MTM) loss in their bond portfolio during the quarter, they added.
Usually, credit growth during the first quarter is lower and in one digit, but the trend is different in the reporting quarter due to a lower base last year. “Credit growth trends can survive by increasing the use of working capital, although the growth led by capital expenditure can be lower,” Jindal Haria, Director of Financial Institutions in India Ratings & Research, told MoneyControl on Tuesday, July 12.
The latest temporary data submitted by the lender with the stock exchange also shows the revival in credit requests.
For example, AU Small Finance Bank in the submission of exchange on July 4 said that the total loan rose to RS 50,179 CRORE at the end of June, 5 percent higher on a quarter-to-quarter-quarter (Q-O-Q) and 37 percent on an annual basis. Bandhan Bank, on the other hand, reported that its progress rose 20 percent Y-O-Y to RS 96,649 Crore on June 30. These figures are temporary and reported before considering the abolition, private loans inform the stock market.
In accordance with Icici Securities brokers, banks are likely to post more than 12 percent of Y-O-Y credit growth in Q1.
Likewise, HDFC Bank, Mahindra Bank and IDFC First Bank boxes are expected to register more than 20 percent of Y-O-Y credit growth during Q1, while RBL banks will continue to miss the average industrial growth, the broker said.
Bank non-food loans grew by 12.6 percent y-o-y in May to 119.74 Lakh Crore RS, exceeding 4.9 percent growth that was registered in May 2021, in accordance with data on the distribution of sectoral reserves of Bank India (RBI) which was released on June 30.
Credit growth in the industrial segment, which has been left behind in the one-digit region since the pre-satisfaction period, was established at 8.7 percent Y-O-Y in May, up from 0.2 percent registered last year. Credit for large industries by banks, continues to be muted, grew 1.9 percent based on Y-O-Y during May to the decline of 3.1 percent in May 2021, according to RBI data.
Increase in the Cumulative Repo Level of 90-Basis Point (BP) RBI During the reporting quarter it is likely to cause an increase in bank net interest margin (NIM), the main parameter to determine the profitability of the lender.
RBI on June 8 raised the repo level by 50 bps to 4.90 percent. The increase in the central bank’s interest rates came after his last meeting in May where he appointed a repo of 40 bps.
With 43 percent of bank floating interest rates related to external benchmarks, interest rate transmission occurs at faster speeds, analysts said.
According to Icici Securities, the lender has raised the Marginal Fund -Based Loan (MCLR) marginal fee by 25 bps to 65 bps since January, with private banks leading.
Retail deposit rates have risen in all boards, he said, but not commensurate with the increase in repo. The wholesale period deposit rate, on the other hand, has witnessed the sharpest surge between 100 bps and 170 bps in a one -year bucket.
We hope that the impact on NIM is relatively more detrimental to IDFC First Bank, RBL Bank, Indusind Bank and Mahindra Bank box and profitable for the Indian State Bank (SBI) and Axis Bank,” said Icici Securities.
Because 45-50 percent of HDFC Bank, Indusind Bank and Portfolio of Bank RBL loans are related to fixed interest rates, the increase in deposit rates is likely to be greater than the increase in loan interest rates, he added.