17 Nov 2022

Outlook

  • Credit growth in the industry is gradually picking up and becoming more broad-based.
  • Loan segments are showing efficiency in collection trends.
  • There is an improvement in credit-deposit ratios, and faster re-pricing of loans is leading to an expansion in net interest margins.
  • Incremental credit costs could be lower as many private banks have up-fronted a large portion of provisioning requirements.

 

Tailwinds

  • Sustained growth in market share in deposits and assets
  • A bounce back in economic activity with strong credit demand

 

Key risks 

  • Sharper-than-expected hikes in policy rates, which could lead to higher treasury losses
  • Deposit growth lagging credit growth
  • A slowdown in credit demand from corporates, which could lead to lacklustre systemic credit growth

 

(House View aims to regularly provide readers with Kotak Mahindra Mutual Fund’s latest update on various sectors)

 

 


The views discussed here are as on end of September 2022.

The information contained herein is extracted from KMAMC internal research/different public sources. All reasonable care has been taken to ensure that the information contained herein is not misleading or untrue at the time of publication. This is for the information of the person to whom it is provided without any liability whatsoever on the part of Kotak Mahindra Asset Management Co Ltd or any associated companies or any employee thereof. Investors may consult their financial experts before making any investment decision.

The article includes statements/opinions which contain words or phrases such as "will", "believe", "expect" and similar expressions or variations of such expressions, that are forward looking statements. Actual results may differ materially from those suggested by the forward looking statements due to risk or uncertainties associated with the statements mentioned with respect to but not limited to exposure to market risks, general and exposure to market risks, general economic and political conditions in India and other countries globally, which have an impact on investments, the monetary and interest policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices etc. Past performance may or may not be sustained in future.

This is not intended for distribution or use by any person in any jurisdiction where such distribution would be contrary to local law or regulation. The distribution of it, in certain jurisdictions may be restricted or totally prohibited and accordingly, persons who come into possession of this material are required to inform themselves about, and to observe, any such restrictions. The sector(s) referred, should not be construed as any kind of recommendation and are for general information only.

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© Kotak Mutual Fund.2022
Mutual fund investments are subject to market risks, read all scheme related documents carefully.
© Kotak Mutual Fund.2022
Mutual fund investments are subject to market risks, read all scheme related documents carefully.