Despite banks posting impressive third quarter results, the sector on the whole, has been on a downtrend. Manish Karwa of Kotak Institutional Equities spoke to CNBC-TV18's Latha Venkatesh and Sonia Shenoy, about his expectations from the banking sector. He also gave his top picks from the lot.
Below is a verbatim transcript of his interview with CNBC-TV18. Also watch the accompanying video.
Q: It has clearly been a very good set of numbers for most of the banks. But at the outset for the sector would you say that this is the best quarter and Q4 would clearly be under more pressure under pressure in terms of margins or amount of loan growth?
A: Yes, loan growth this quarter has been 25% odd for the sector and few of the banks have done better. Margins obviously were much higher and much better expectations. As we move forward and as deposit costs also start catching up, with the loan ease, you would see some bit of margin decline coming in. But as we have been highlighting it before also, till the time the liquidity in the economy remains tight, the pricing power will always remain in the hands of the banks and they are clearly now raising the lending rates as well.
So in that context, till the time the liquidity remains tight, I don
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