The lender's Net Interest Income (NII), which is the difference between interest earned and interest expended, soared 8.2 per cent annually to Rs 582.5 crore in Q2FY25, from Rs 538.4 crore in Q2FY24
CLSA expects private sector banks, which have been stock market laggards over the past few months, to give better returns ahead, given a good business outlook and inexpensive valuations
The current level of NPAs masks the actual pain due to restructuring done under regulatory packages, both in 2020 and this year
The second Covid wave has sharply affected credit demand, with a steep fall in inquiries across product categories in April 2021
ICICI Bank, Axis, among others see rise 'proforma' slippages in Q3
Strong growth is expected to counter the likely asset quality issues
He says there can be an impact on profitability as there will be more NPAs
Fresh slippages have also come down and as a result, the system-level provision coverage ratio has jumped to 60.9 percent during the period
But, it will take a couple of quarters for earnings to improve and credit cost to normalise