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Indian Banks - Rates Transmission Continues; NIMs To Exhibit Positive Bias In Near Term: Motilal Oswal

WALR on fresh loans rose in Nov and has grown 135 bps since Apr-22, with PSU Banks seeing a rise, private banks saw a modest rise

<div class="paragraphs"><p>A man holding Indian rupee banknotes. (Photo: Usha Kunji/BQ Prime)</p></div>
A man holding Indian rupee banknotes. (Photo: Usha Kunji/BQ Prime)

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. 

Motilal Oswal Report

We note that the weighted average lending rates on fresh loans increased 17 basis points month-on-month and 135 bps since Apr-22, with public sector undertaking banks reporting a 28 bps month-on-month and a 149 bps increase since Apr-22.

Private Banks saw a modest increase of 6 bps month-on-month and 101 bps since Apr-22. Reserve Bank of India has cumulatively raised the repo rate by 225 bps since Apr-22 to 6.25%.

The WALR on outstanding loans rose 8 bps month-on-month and 71 bps since Apr-22 to 9.43% for the banking universe. The increase was higher at 11 bps/82 bps for private banks and modest at 5 bps/59 bps PSU banks.

Weighted average term deposit cost for the banking system rose 13 bps month-on-month and 59 bps since Apr-22 to 5.62%, led by a 13 bps month-on-month and 59 bps increase since Apr-22 for private banks versus a 13 bps month-on-month and 51 bps increase since Apr-22 for PSU banks.

Click on the attachment to read the full report:

Motilal Oswal Financial Sector Update.pdf

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