Earnings will be increased by a low base in the Banking, Financial Services, and Insurance sector during the first quarter of FY23.
Asset quality concerns for financiers are expected to have subsided by Q1FY23, and attention will now turn to growth.
Slippages and credit costs are probably going to stay stable, if not get better, and strained pool will get smaller.
Banks' increases in retail deposit rates after the repo rate hike behind the rate increases for both EBLR and MCLR.
For RBL, IDFC FIRST Bank, IndusInd, and Kotak, the impact on NIMs is anticipated to be considerably more negative, while it will be positive for SBI and Axis.
Earnings will probably be hampered by the rise in G-sec and corporate bond yields and the resulting pressure on treasury gains.
Advances growth is forecast to maintain a 2-4 percent q-o-q momentum while cost structure is anticipated to be expensive.
In the first quarter of FY23, we anticipate that NII for banks will expand by about 17% year over year, operational profit growth will remain steady,
and earnings growth of more than 50% will be supported by declining credit costs and a lower base.
Inflation might dip under 6% sooner than anticipated
Inflation might dip under 6% sooner than anticipated