INSUBCONTINENT EXCLUSIVE:
MUMBAI: Higher provisions due to rising non-performing assets, losses on account of marked-to-market investments in government securities
and uncertainty on leadership will weigh on banks as they set to report fourth-quarter results.
Analysts expect net profits of large banks
analyst at Motilal Oswal.
Brokerage firm Jefferies expects PNB to report a loss of Rs 8,759 crore in the quarter through March, compared
expect PNB to report a large loss owing to higher provisions
We expect net interest margins to improve and loan growth at 10 per cent y-o-y
Banks, however, will get some relief because of two temporary leeway given by the RBI.
Earlier this month, RBI said provisions for accounts
referred to the NCLT can be reduced to 40 per cent of dues from 50 per cent just for the March quarter.
Banks have also been allowed to
spread out their trading losses over four quarters, after a steep rise in bond yields over the past two quarters
The benchmark 10-year bond yield has moved in the 7.21-7.82 per cent range, touching a 2-year high during the quarter ended March which
exposed banks to marked-to-market losses.
But the real concern is an old one: elevated NPAs from the corporate sector
Further, the new RBI framework on stressed assets resolution, along with ageing of existing NPAs and write-down of security receipts from
large stressed loans, which were under implementation for various earlier restructuring schemes, may get classified as NPA under the new
the scanner over nepotism charges
