Better times ahead for banking sector
New Delhi: Better times are ahead for the
banking sector as a revival in the economic activity coupled
with inflation is likely to boost the credit growth in the
second half of current financial year, says a study.
"The credit blues are behind ... and better times are
ahead ... the second half of fiscal year 2010, is likely to
witness a revival in economic activity and inflation to drive
a pick up in credit growth from current levels," the report by
brokerage firm IDFC SSKI said.
The sequential expansion in margin is also going to
continue in the said period of time as "largely stable lending
rates, coupled with traction in credit growth would support
margins in the second half of FY`10," the report said.
However, the current and saving accounts (CASA) ratio
may face some pressure in the fourth quarter of FY`10, as
deposit growth accelerates and interest rates harden, the
Regarding gross non-performing assets (NPAs), the report
said, "Accelerated provisioning in the context of RBI`s new
floor on total coverage of 70 per cent likely to limit decline
in provision costs."
The Reserve Bank in the second quarter monetary review in
October left rates unchanged as there was excess liquidity and
weak credit demand, but going forward, RBI may tighten the
rates in a bid to ward-off inflationary pressures in the
second half of FY`10.
In the second quarter of this financial year, banks
reported a net profit growth of 25 per cent year-on-year
ahead of market estimate of 14 per cent.
The CASA ratio of the banks also recovered from low
levels in the first quarter of 2010, driven by "sanguine
interest rates at a systemic level", besides, lower deposit
growth in line with muted credit off-take also helped.
Besides, the contained rise in gross NPAs, given the
large restructuring of stressed advances by banks till first
quarter of FY`10 and improvement in growth conditions likely
to alleviate credit quality concerns in the long term.
So far this year, NIMs have shown an improvement on a
quarter on quarter basis. The CASA ratio also increased across
banks, aided by benign systemic interest rates, the report
More from India
More from World
More from Sports
More from Entertaiment
- Dr Subhash Chandra Show: Aspiring for more than what you have!
- Mathura SSP receives death threat letter, message for PM Modi
- Reservation issue: Police register case against Bainsla, 20 others
- Zee Media exclusive interview with Haryana CM Manohar Lal Khattar
- Zee Media exclusive chat with 'Welcome to Karachi' cast
- UP Minister allegedly threatens, abuses Gonda businessman
- Manali: Heavy corruption found in environmental taxes
- Aapke Sitare: Astro prediction for May 24, 2015
- Watch: Fast N Facts @ 7:30pm
- One year of Modi govt: How satisfied is the common man?
- Mumbai architecture creates double decker bus from scrap!
- One year of Modi govt: How satisfied is the common man? Part-2
- Jaipur girl Mini Rajpal wins Miss India Deaf 2015!
- Five unmanned parachutes spotted over Mumbai airport
- UP: Jammu-bound Muri Express derails in Kaushambi
- IPL 2015 Final: MI vs CSK - As it happened...
- CBSE.nic.in 12th XII Results 2015: CBSE Board (cbseresults.nic.in) Class 12th XII Exam Results 2015 to be announced on May 25
- Heatwave continues in North India; death toll in Andhra Pradesh, Telangana more than 400
- IPL 2015 final: Mumbai Indians thrash Chennai Super Kings by 41 runs to lift second title
- CBSE 12th Result 2015 to be announced on Monday
- Death threat to PM Narendra Modi ahead of Mathura rally sends police into tizzy
- Organisation demands re-examination of AIPMT 2015
- Kejriwal completes 100 days in office, AAP says centre 'shadow boxing' over row with LG
- CBSE Class 12th Board Results 2015 to be announced on Monday, May 25
- Online filing of applications for UPSC civil services exam begins
- No alliance with JD-U in Bihar: BJP
- Not just today, Muslims feeling alienated since 1947: Najma Heptulla
- Check cbseresults.nic.in for CBSE Class 12 result 2015
- Police register case against Bainsla, 20 others as Gujjar agitation continues
- LIVE - Cbse.nic.in & cbseresults.nic.in Class 12th XII Results 2015: CBSE Board Class 12th XII Exam Results 2015 to be announced shortly