Nirmal Bang has come out with its report on "Banking Q3FY13 quarterly results review". The research firm continues to prefer private banks as compared to Public Sector Banks in terms of core income growth and asset quality.
Nirmal Bang has come out with its report on "Banking Q3FY13 quarterly results review". The research firm continues to prefer private banks as compared to Public Sector Banks in terms of core income growth and asset quality. The initiatives taken by the government of India in order to revive the economy will have a long term positive impact on the overall sector, says the research firm.
Q3FY13 Quarterly Results Review
The overall banking result for Q3FY13 was broadly on expected lines. The highlights of the overall banking results are:
Going forward, after taking cues from various interactions with Management post results; declining interest rate cycle and improving macro economic conditions, we believe that the asset quality woes for the banking sector on a whole seems to be peaking out. Although we do not expect an immediate recovery in the performance of the banks, we believe that from Q1FY14E onwards the signs of improvement will be visible albeit on a gradual basis. We have to accept the fact that slippages will continue to remain a part and parcel of the PSU banks but better recovery efforts are likely to help them in bringing down the NPAs from the current levels.
We continue to prefer Private Banks as compared to Public Sector Banks in terms of core income growth and asset quality. Based on our analysis of the Q3FY13 results we have shortlisted some stocks which have demonstrated better performance than the other banks and based on that can outperform the overall performance of the banking sector.
Going forward: What needs to be watched out for
The initiatives taken by the government of India in order to revive the economy will have a long term positive impact on the overall sector. We believe that positives of rate cut and revival of economy would play a crucial role in performance of the banking sector as a whole. Based on our various parameters and current valuations we believe that the following stocks can outperform the overall banking sector. We have retained most of the stocks of our last review performance as they have been delivering consistent performance over the period. In this review we have added Union Bank of India (improving performance in the last 2 quarters); HDFC Bank (consistent performer) and PNB (positive surprise) in our list.
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READ MORE ON Nirmal Bang, Banking Q3FY13 quarterly results review, PSU banks, NPA, HDFC Bank, Yes Bank, Indusind Bank, ING Vysya, J&K Bank, PNB, Union Bank of India, Public Sector Banks, Recommendation
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