Emkay Global Financial report suggests that there will likely be a moderation in overall credit growth due to regulatory measures.

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Emkay Global Financial reports about credit growth of banks

Emkay Global Financial Services anticipates a deceleration in the credit growth rate to 12-14% year-on-year (YoY) for FY25-27E, down from the present 16.5% YoY. Additionally, they forecast a decrease in the loan-to-deposit ratio (LDR) from the current 80% to 75%.

A report from Emkay Institutional Equities suggests that the overall deposit growth, particularly the deceleration in retail deposit growth (including savings accounts), could pose a structural risk to India’s long-term retail credit growth trajectory unless addressed.

In our research report, Emkay Global stated that we anticipate a robust credit growth in 4QFY23, barring any impact from a potential new wave of Covid. Moreover, we foresee continued strength in FY24, driven by positive consumption patterns and an uptick in corporate credit growth. Additionally, we expect margins to remain strong and anticipate further enhancement in banks’ profitability due to improving asset quality resolution, which could contribute to stock gains.

Emkay Global Financial Services Ltd. is a leader in the financial services sector, actively creating wealth for our clients for over two decades.

Founded in 1995 with a clear goal of offering sound, research-backed financial advice, we have successfully served a wide variety of highly distinguished clientele around the world; including foreign institutional investors (FIIs), domestic mutual funds, hedge funds, banks, insurance companies, private equity firms, corporate houses, small and medium-sized enterprises and high net worth individuals (HNIs).

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