Banking And Financial Sector Q4 Preview - NPA Reporting To Normalise; Earnings Outlook Positive: Nirmal Bang 

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Nirmal Bang Report

With the Supreme Court’s standstill order on asset classification lifted, reporting of non performing assets will normalize, reflecting the true extent of recognized stress.

Moreover, we would also keenly watch incremental trends and commentary on restructuring and overall asset quality outlook.

While the economic recovery has been on an upward trend sequentially since lifting of the lockdown, credit growth has continued to remain lacklustre.

For the latest reported period (March 2021), systemic credit growth stood at 6.4% YoY.

For our banks’ coverage, we expect overall advances growth of 6% YoY and 3.3% QoQ (private banks to grow higher).

We expect growth to be driven by retail advances.

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