New Delhi [India], CLSA (formerly known as Credit Lyonnais Securities Asia) said that after battling the government's ire and bad loan difficulties, Indian banks have found themselves in a much stronger position. Because the balance sheet and profits have grown significantly. Capital Markets and Investment Group.
The firm said in its observation, "We believe Indian banks are in good shape after a volatile decade. Balance sheets are the strongest in more than a decade, and profits have grown at the fastest pace (in 10 years) quadrupled).
It further said that the return on equity (ROE) of the Indian banking sector is the highest since FY 2011.It said deposit growth should match the acceleration in credit growth, which has increased from an average of 10 per cent to 15 per cent in the last two years during FY 2012-22.
Citing favorable conditions in the sector, the firm estimated that private sector banks, which have not performed well in the stock market in recent times, are expected to deliver better returns due to the positive business outlook.
The firm observed that over the last year and the last five years, public sector banks have performed significantly better than private sector banks.
However, it also noted that over the last decade, private sector banks have overtaken PSU banks by a margin in current account (CA) deposits and have also reduced non-deposit lending.
Highlighting net non-performing loans (Net NPLs), which was once a widely discussed issue, the firm said it fell to decade low due to better asset quality, stronger provision buffers and improved capital position. Is.The PAT for this sector has improved rapidly and has quadrupled in the last decade. The banking sector's ROE of 15 percent is the highest since FY 2011.
As per the firm's observation, credit growth in the sector has increased from the decadal average of 10 per cent to 15 per cent in the last two years across all sub-segments and possibly some variations. By corporate bond replacement.
For a long time, credit growth and deposit growth have been out of sync. The company underlined that the quality of corporate credit has also improved in the last 5-7 years.
The firm said in its observation, "We believe Indian banks are in good shape after a volatile decade. Balance sheets are the strongest in more than a decade, and profits have grown at the fastest pace (in 10 years) quadrupled).
It further said that the return on equity (ROE) of the Indian banking sector is the highest since FY 2011.It said deposit growth should match the acceleration in credit growth, which has increased from an average of 10 per cent to 15 per cent in the last two years during FY 2012-22.
Citing favorable conditions in the sector, the firm estimated that private sector banks, which have not performed well in the stock market in recent times, are expected to deliver better returns due to the positive business outlook.
The firm observed that over the last year and the last five years, public sector banks have performed significantly better than private sector banks.
However, it also noted that over the last decade, private sector banks have overtaken PSU banks by a margin in current account (CA) deposits and have also reduced non-deposit lending.
Highlighting net non-performing loans (Net NPLs), which was once a widely discussed issue, the firm said it fell to decade low due to better asset quality, stronger provision buffers and improved capital position. Is.The PAT for this sector has improved rapidly and has quadrupled in the last decade. The banking sector's ROE of 15 percent is the highest since FY 2011.
As per the firm's observation, credit growth in the sector has increased from the decadal average of 10 per cent to 15 per cent in the last two years across all sub-segments and possibly some variations. By corporate bond replacement.
For a long time, credit growth and deposit growth have been out of sync. The company underlined that the quality of corporate credit has also improved in the last 5-7 years.
