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Private banks may see NIMs dip in Q2FY21; loan restructuring roadmap eyed

Market participants would watch out for greater clarity on NPA recognition, loan restructuring roadmap, and credit costs for the rest of the year

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Estimates by Motilal Oswal Financial Services peg the contraction in pre-tax profit at 7.1 per cent on a yearly basis

4 min read Last Updated : Oct 14 2020 | 10:21 AM IST

The July-September quarter for financial year 2020-21 (FY21) may mark the beginning of downtrend in net interest margins (NIMs) for banks, fear analysts. That apart, market participants would watch out for greater clarity on NPA recognition, loan restructuring roadmap, and credit costs for the rest of the year.

“Q2FY21 earnings for the BFSI sector will be a reflection of a path half way through normalisation on some parameters, but just the beginning of journey for stress recognition and downward NIM trajectory,” observed analysts at ICICI Securities.

The six month moratorium period, provided by the Reserve Bank of India (RBI), ended

Topics : Q2 results private sector banks Indian banking sector HDFC Bank ICICI Bank Axis Bank strengthen loan restructuring

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