Bank profits are likely to fall in September quarter

By | August 15, 2011

As per a recent press report it is seen that decelerating credit demand, increased provision for bad debts and low margins due to tight monetary policies are likely to affect the bank profits of September quarter to fall. The weakening investment environment has caused serious impact in credit growth and reports said that this movement is likely to continue in the coming months. A report from Standard Charter said that the annual loan growth, which was 25 per cent last year, would be 18 per cent this year. This would continue to be the same in the FY13.

According to a report by Sharekhan the Net Interest Income would remain the same on quarter – on – quarter basis if there is slow growth in credit growth. The public sector banks are expected to report a quarter – on – quarter NII growth to be 2.9 per cent whereas the NII growth of private sector banks are expected to be at 3.5 per cent.

The report from IDBI Capital said that the provisions would increase as loans are restructured. However, a report from Standard Charter said that there would not be any high non-performing loans in the period of June – September.

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About Pradeep Yuvaraj

Pradeep Yuvaraj is a Co-Founder and Director at Finerva Financial Solutions Private Limited, a financial education company focused on personal finance education. He has penned over 250 articles relating to Personal Finance and clocked over 500 hours of educating individuals on managing personal finance. He is a serial entrepreneur and has been associated with 7 Start-ups. His entrepreneurial experience spans industries as varied as Education, Gas Engineering, Automobile Design, Software development and more recently a Pure play presentation design company. Prior to turning entrepreneur in 2005, he has worked for 3 of the top ten companies of the world - Shell, ExxonMobil and Total SA. This experience included handling Branch Operations, Channel Sales and Business Development across 5 states over a period of 8 years. He holds an MBA from Symbiosis and an Electronics Engineering Degree from the University of Pune.

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