Banks: Banks Could Record Strong Second Quarter Profit Increase, But Provisioning Will Be Harsh

Asset quality could pose problems with expected short-term slippages in the retail, SME and microfinance segments. Although analysts said there could be a drop in the June quarter.

Synopsis

Indian bank profits for the September quarter are expected to increase sharply, but tempered by higher provisioning in the retail and small and medium-sized business (SME) segments which saw an increase in delinquencies. Profits are expected to recover, driven by a resumption in business growth, commissions and a gradual reduction in credit costs.

Mumbai: Indian bank profits for the September quarter are expected to increase sharply, but tempered by higher provisioning in the consumer lending and small and medium-sized business (SME) segments which have seen an increase in delinquencies. Profits are expected to recover, driven by a resumption in business growth, commissions and a gradual reduction in credit costs. “In our opinion, normalization of activity and asset quality should accelerate in the absence of a

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