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Systematix Research Report
In Q2 FY22 (till September 24, 2021), we expect large private banks to outperform the banking industry in balance-sheet expansion with incremental market shares gains in credit and deposits.
We expect our banking sector coverage universe to post credit/average working funds/net interest income growth of 10.5%/11%/6.2% YoY, respectively.
Non-interest income, mainly aided by cash recoveries, would support operating profit growth.
With a lower net delinquency rate, core credit costs would also be lower, aiding the bottom line.
However, banks would utilize one-off cash recoveries in Dewan Housing Finance Corporation Ltd. loans to increase their contingent provision.
Outliers would be HDFC Bank Ltd. and ICICI Bank Ltd. in core earnings and State Bank of India in non-core earnings.
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