A recent note by JP Morgan stated that for banks, the system constraints shift from non-performing assets to deposits. “Deposit franchise will likely re-rate versus asset franchise,” the report adds. In fact, December quarter (Q3) results of IndusInd Bank and HDFC Bank highlights the role of deposits in maintaining profitability and keeping cost of funds under check.
The noticeable blip for both banks was the movement of the low-cost current account-savings account (CASA) deposits. For IndusInd, while the CASA ratio was maintained at 43.6 per cent in Q3, deposit ...
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