Banking - New Private banks to deliver better numbers yet again - Angel Broking

Over the last few years, PSU banks have continuously lost profit market share (both on reported profit as well as on profit adjusted for increase in net NPAs) to private banks within our coverage. During 3QFY2014 as well, we expect earnings divergence amongst our coverage banking stocks to continue, as we anticipate new private banks to report a healthy earnings growth of 17.1% yoy, while our coverage PSU banks are expected to report weak performance with earnings de-growth of 9.0% yoy.

New private banks are expected to deliver healthy NII growth of 20.1% yoy, which is expected to aid healthy growth of 18.4% yoy in operating profit and 17.1% yoy in earnings. On the other hand, PSU banks are expected to register moderate NII growth of 10.6% yoy and de-growth of 4.8% yoy in non-interest income. Additionally, growth in operating expenses for PSU banks is expected to be higher at 21.6% yoy as against 11.1% yoy for new private banks.

Source : Equity Bulls

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