We estimate NII growth of nearly 21 per cent YoY (flat QoQ) in Q2FY24, with IDFC First Bank at nearly 31 per cent, ICICI Bank at about 24 per cent, Kotak Mahindra Bank at about 24 per cent, IndusInd Bank at about 18 per cent, and Axis Bank at 16 per cent YoY,' said Motilal Oswal. However, healthy loan growth will continue to aid NII (net interest income). 'Margins are expected to moderate further due to the rising cost of deposits and stagnating loan yields. However, on a quarter-on-quarter (QoQ) basis, excluding HDFC Bank, both the PPoP and PAT could be flat. Private banks, excluding HDFC Bank, may see healthy earnings, supported by healthy business growth and benign credit costs, but margin compression and elevated opex may pose challenges to the overall growth trajectory, Motilal Oswal said.Įxcluding HDFC Bank, Motilal Oswal expects private banks to report PPoP growth of nearly 18 per cent YoY and PAT growth of about 25 per cent YoY in Q2FY24. Q2 earnings expectations for private banks (excluding HDFC Bank) 'Private and PSU banks are expected to post earnings growth of about 25 per cent and 20 per cent YoY, respectively, in Q2,' said the brokerage firm.Īlso Read: Earnings preview: Indian IT firms to report soft numbers in Q2FY24 revenue, profit likely to be muted It expects its coverage banks to sustain PPoP (pre-provision operating profit) growth at about 12 per cent YoY in Q2. The brokerage firm estimates its banking coverage universe (excluding HDFC Bank) to report earnings growth of about 22 per cent YoY in Q2FY24. 'Restructured book is likely to moderate further, while low SMA (special mention account) book will keep credit costs in check,' said Motilal Oswal. Motilal Oswal expects slippages to remain under control, which, along with higher recoveries, should further aid the continuous improvement in asset quality. Subscribe today by clicking the link and stay updated with the latest financial insights! Click here!) (Exciting news! Mint is now on WhatsApp Channels.

We estimate sectoral margins to remain under pressure due to rising funding costs,' Motilal Oswal said. 'In Q2FY24 so far, the banking system has added ₹2.28 lakh crore of deposits ( ₹84,500 crore adjusted for the HDFC merger) and while we expect deposit mobilisation to pick up significantly toward the quarter end, the overall accretion would still be important to monitor as HDFC Bank alone is going to account for a significant deposit market share. Hence, the brokerage firm underscored, that the gap versus credit growth has moderated further to 2.3 per cent in Sep’23 (excluding HDFC, HDFC Bank merger). Moreover, the brokerage firm believes the systemic deposit growth of the banking sector has improved to 12.8 per cent YoY (adjusted for merger), aided by a benign base, the discontinuance of the ₹2,000 currency note and an improved real rate of return. The credit card business is seeing strong momentum with robust growth in spending and new card issuance,' Motilal Oswal said.Īlso Read: Earnings preview: Experts expect more misses than hits in Q2 how can it impact market sentiment? 'The home, vehicle, unsecured, and small business segments continue to do well.

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