Mumbai: Banks are likely to see uptick in operational performance while NBFCs will see improvement in their NIM (net interest margin), according to broking firm Centrum Financials.
"We expect banks under our coverage to report moderate loan growth (+13.6 per cent YoY), leading to an uptick in both QoQ and YoY NIM," a Centrum Financials report said.
The report noted that the pre-provision operating profits could grow over 10.9 per cent on a year-on-year basis. On a YoY basis, credit costs are likely to drop 13.1 per cent, which would translate to healthy growth in the overall year-on-year profit after tax (PAT).
"For asset financers (AFCs), we see a lower AuM growth (asset under management) at 17 per cent YoY (vs 19.8 per cent sequentially) owing to the auto slowdown. Asset quality for MMFS in terms of provisions may come in lower, thus impacting overall PAT for AFCs. Micro lenders (MFIs) might see a similar sequential YoY AuM growth of 37 per cent led by Ujjivan (+48 per cent YoY). On the asset quality front, the key monitorable remains the impact of the eastern portfolio and hence we have factored higher provisions for MFIs."
It further said that volumes and revenue for rating agencies may be impacted by continued slowdown in capital market activity -- bonds and commercial papers.
"We expect our large-cap banks (SBI, Axis, ICICI) to report 13.6 per cent YoY loan growth, led by ICICI and Axis. NIM is likely to trend flat QoQ, while PPOP could grow 10.9 per cent YoY. Fresh slippages are likely to decline slightly QoQ. QoQ credit costs for the three banks could see a slight drop," it said.
Profit after tax is likely to improve sharply YoY, due to both the lower b ase YoY and a lower tax rate, it added.