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Bloomberg Quint
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Banking Sector Q4 Preview: Lenders Brace For Muted Quarter On Soft Loan Growth, Margin Squeeze
- The banking sector is predicted to have a muted quarter in Q4 due to soft loan growth and margin pressures.
- Frontline private lenders like ICICI Bank and Kotak Mahindra Bank are expected to remain resilient.
- Mid-sized banks, such as IndusInd Bank and AU Small Finance Bank, may face challenges.
- Public sector banks are likely to report subdued earnings growth in line with expectations.
- Overall, banks are expected to see lower credit costs from regulatory changes, but concerns remain for certain segments.
- State Bank of India and Bank of Baroda are expected to post steady earnings with strong asset quality and treasury gains.
- The second half of the new financial year may offer more favorable conditions for state-owned banks and larger private lenders.
- Private sector banks are seen as having solid earnings resilience and reasonable valuations for investors.
- The quarter presents mixed prospects, with evolving liquidity conditions and asset quality concerns being navigated by the banking sector.
- PSU banks are currently better positioned in the near term, with potential benefits from revised norms and recovery trends in asset quality.
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