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Below the Quote on the Outlook on NBFC and Bank Earnings from Ajit Kabi, Banking analyst at LKP Securities

We expect the earnings of Banks and NBFCs to stay stable in Q1 FY24.

The loan growth is expected to witness sequential jump. Factoring pre-result release of several banks. We expect the loan growth to be in mid teens for large banks. The vehicle financing NBFCs to witness strong disbursement. Furthermore, Gold Financiers are likely to post good growth considering higher gold prices. On a system level we expect the YoY growth to be around 16%.

Additionally on the margin front, we expect the NIMs to compress marginally as deposit repricing will be faster than new loans yields. Term deposit rates have also increased for several banks. Hence, we are likely to witness marginally lower NIMs sequentially.

As per as asset quality is concerned, the lower NPA formation and declining NNPA ratio are likely to keep check in credit cost. Hence the profitability is likely to stay intact.

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