The earnings of public sector banks (PSBs) may take a beating in Oct-Dec 2012 quarter because of
an additional provisioning of 0.75 per cent, as directed by the Reserve bank of India (RBI), analysts feel.
Analysts expect private sector banks to post better earnings results during the quarter as compared to their public counterparts.
During the quarter, while private sector banks are expected to register an earnings growth of about 20-25 per cent public sector ones may post around 16 per cent, analysts said.
Considerable rise in slippages and restructured assets and deterioration in operating performance led by fall in margins are the reasons for underperformance of state-run banks over the past two years.
With expectation of economic recovery and monetary easing in the financial year 2014, some analysts expect the stress in the balance sheet to peak out in first half of the calendar year 2013.
As far as interest income is concerned, public sector banks will lag behind private sector banks by about 7-8 per cent with a marginal compression carried forward from the second quarter,said Vaibhav Agrawal, Senior Analyst with Angel Broking.
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