BANKING SECTOR
CREDIT SUISSE ON BANKS : 05.05.2022
• Deposit franchisees to be more resilient to inflation
• Earnings to be more resilient in a rising rate environment
* Mid-sized banks and NBFCs are likely to underperform
• 20-50% of loans for the larger banks already linked to external
MACQUARIE ON BANKS : 05.05.2022
• Repo hike should result in increasing lending rates
• Large banks have closer to 30-40% linked to repo rate loans
• Bank margins should improve, uncertainty remains around growth
• Some part of margins will be offset by CRR hike
• HDFC Bank and ICICI Bank are our top picks in the sector
CLSA ON BANKS : 05.05.2022
* Positive for bank margins; macro impact needs to be watched
• Repo hikes are positive for bank margins
• Asset quality should hold; growth impact to be seen
* See liability side test for mid-sized banks
CLSA ON BANKS : 06.04.2022
* CLSA believes mid-sized banks are gaining growth Momentum & seeing improvement in collections
* Mid-sized Banks Gaining Growth Momentum
* Momentum Is Strong And Collections Improving
* Commentary On Collections Indicate A Better Trend Vs Pre-COVID Levels
* For Indusind Bank, Residual MFI Provisions & Margins Will Be Key
CS ON BANKS : 15.03.2022
* Credit Suisse believes credit revival may be delayed for banks, cut bank earnings by 4-9% on account of lower growth & treasury hit & cut earnings of select NBFCs By 7-12% on lower growth. higher funding & credit costs
* Credit Revival May Be Delayed
* Sharper Monetary Tightening, Will Impact Small Bank/NBFCS' NIMS
* Asset Quality Impact Limited To Certain Pockets
* Continue To Prefer Large Private Banks For Strong NIMS & Asset Quality Buffers
* Cut Bank Earnings By 4-9% On Account Of Lower Growth & Treasury Hit
* Cut Earnings Of Select NBFCs By 7-12% On Lower Growth, Higher Funding & Credit Costs
* Within NBFCs, Prefer Chola, HDFC & Shriram Transport
BANK OF AMERICA ON BANKS : 15.03.2022
• BANKEX down 16% from peak vs Sensex down 10%
• Valuation multiples are now down to historical averages
• Current setup is supportive of bank earnings
• Commodity inflation = better loan growth + Higher rates
* Buy HDFC Bank, ICICI, Indusind Bank, SBI
BofA On Banks - Year Ahead 2022 : 11.01.2022
* BofA is constructive on banks on the back of good marco set-up with near term risk.
• Long due 'as normal as it
Banks are now leading from the front : 11.01.2022
* Currently, there is no IPO euphoria in markets
* Sizable correction in mid- and smallcap stocks that had turned frothy
* Correction has been short-lived and sectoral churn is visible
* We have to learn to live with market volatility
UBS ON BANKS : 08.07.2021
* Expect muted loan growth & 25-50bps increase in overall NPLs in Q1
• ECLGS scheme is likely to prevent near term deterioration
* Unsecured loans (PL, cards) and LAP are most impacted for private sector
* Prefer banks with greater provision buffers
* Least preferred names are Kotak and PNB
CITI ON BANKS : 06.07.2021
• Pre-Quarter filings show moderation in growth
• Credit growth impacted during 1QFY22
• Deposit growth momentum continues largely strong
• Q1 earnings to be impacted by slower growth
• Q1 may see higher asset quality stress
• Situation is likely to be much better for rest of the year
JPmorgan on Banking sector - 10.06.2021
* Sanjay Mookim of @jpmorgan prefers #banks as his top pick.
• Modelling Credit Growth: Should Improve Post Pandemic. Stay Overweight On Banks
• Strong Monetary Stimulus Currently In Place Should Drive Lending Growth Higher Post-Lockdowns
• Banks Should Do Well Relative To Market If That Happens
* Prefer ICICI Bank, HDFC Bank And SBI.
* See Bottom-Up Signs Of Specific Lending Constraint
* NIFTY Is Trading At C.21x 1-Yr Forward P/E (Close To 15 Year Highs)
* This Has Made Most Stocks/Sectors Very Expensive
* Incremental Investing Must Assume The Global Valuation Support Sustains
* Indian Credit Growth Should Improve-Banks Should Remain Key Picks
UBS ON BANKS : 09.06.2021
* Microfinance overdue loans remained significantly above normal as of March
* Entire overdue build up from H1FY21 remains in default as of March 2021
* Seven states with 50% of MFIN loan share are still highly delinquent
* Prefer Axis, ICICI and SBI; maintain Sell ratings on Kotak and PNB