New Delhi: Indian BankLarge reliance on local deposits props them up as global peers face potential contagion from the crisis emanating from the Silicon Valley bank. Macquarie Group Limited,
Amidst all the “gloom and doom” at global banks, Indian lenders are distinguished with “hardly any risks, directly or indirectly” svbMacquarie analyst Suresh Ganapathy wrote in emailed comments on Monday. The sector has “a domestic deposit funded system with investments in Government of India securities,” he wrote.
Financial companies in India outperformed regional peers on Monday, with Jefferies Financial Group Inc echoing Macquarie’s view. The country’s banking sector gauge rose as much as 0.6% before erasing gains, while the MSCI AC Asia Pacific financial index fell as much as 1.3% to add to Friday’s 2.2% slump.
In Friday’s note, Ganapathy retained his bullish outlook for Indian lenders, expecting a “Goldilocks scenario” for the next two years due to strong asset quality.
“Despite concerns of a slowdown in loan growth and margin compression, the earnings upgrade cycle for the banking sector continues,” the analyst wrote, raising the sector’s earnings growth forecast by 3%-9% for the years through March 2025.
Jefferies also said that SVB Financial Group holds “low potential exposure” to India, as a subsidiary was sold in 2015 and a rebranded version of that company has “good credit ratings and stable liquidity”.
Analyst Prakhar Sharma on Monday said the country’s banks are “well placed” as more than 60% of deposits are household savings.
Amidst all the “gloom and doom” at global banks, Indian lenders are distinguished with “hardly any risks, directly or indirectly” svbMacquarie analyst Suresh Ganapathy wrote in emailed comments on Monday. The sector has “a domestic deposit funded system with investments in Government of India securities,” he wrote.
Financial companies in India outperformed regional peers on Monday, with Jefferies Financial Group Inc echoing Macquarie’s view. The country’s banking sector gauge rose as much as 0.6% before erasing gains, while the MSCI AC Asia Pacific financial index fell as much as 1.3% to add to Friday’s 2.2% slump.
In Friday’s note, Ganapathy retained his bullish outlook for Indian lenders, expecting a “Goldilocks scenario” for the next two years due to strong asset quality.
“Despite concerns of a slowdown in loan growth and margin compression, the earnings upgrade cycle for the banking sector continues,” the analyst wrote, raising the sector’s earnings growth forecast by 3%-9% for the years through March 2025.
Jefferies also said that SVB Financial Group holds “low potential exposure” to India, as a subsidiary was sold in 2015 and a rebranded version of that company has “good credit ratings and stable liquidity”.
Analyst Prakhar Sharma on Monday said the country’s banks are “well placed” as more than 60% of deposits are household savings.
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