What is the final possible impact? Well, the top banks could see their net profit margin (NIM), or core profitability, increase by almost a sixth of a percentage point.
“Lending book revaluation, improved traction in more productive focused product segments and liquidity and excess utilization DSLR camera for growth in compensable advances deposit Cost pressures and support gradually increase in NIM“, Kunal Shah, analyst,
. “Continuing to benefit from the revaluation of externally linked benchmark rates and the marginal cost of lending rate-linked (MCLR) loans is likely to outweigh the pressure on funding costs. .”
Approximately 53% advance at
linked to benchmark external lending rates, followed by 41% and 34%. SBI has a relatively higher MCLR-linked lending ratio at 41%.
“Margins are expected to see a positive trend, supported by an uptick in growth and a revalued interest rate book,” said Nitin Aggarwal, head of research at BFSI. float more.”
. “However, we remain wary of an increase in deposit costs, which could keep margins under pressure in the medium term.”
Banks have higher rates of floating-rate lending, increasing the mix of high-yield assets such as retail and business loans, reducing low-yield RIDF bonds and franchises, experts say low-cost commercial liability will have stronger profit margins.
MB Mahesh, at Kotak Institutional Equities, said: “Lending rates for new loans are on a clear upward trend, while lending rates for outstanding loans are also trending the same. self, showing disciplined lender behavior”. “The spread between loan interest rates and average term deposit rates has remained stable, especially for private banks. Another rate hike in December last year. 2022 ensures that we will continue to see a widening range in the near term, but the exchange rate deposit market is also becoming active during the day.”
