Banks are expected to see a significant increase in their profits as loan withdrawals increase

– The position of the country’s banks in terms of NPAs is favorable at present

Updated: Oct 8th, 2023

Mumbai: On the one hand, the increase in lending rates and on the other hand, the significant increase in the demand for loans is expected to increase the interest income of the country’s banks. The position of banks on the issue of non-performing assets is favorable at present.

In the second quarter of the current financial year, net interest income has been expected to increase by 18 percent year-on-year while net profit by 25.30 percent in a research report.

Private banks will see higher growth in net interest income as compared to public sector banks. Interest is the main source of income for banks.

However, rising deposit rates may put pressure on interest margins, it has also been opined.

According to Reserve Bank data, as of September 22, loans rose by 15.27 percent year-on-year to Rs 145.58 trillion, while deposits rose 12.34 percent to Rs 191.33 trillion.

The position of banks on non-performing assets (NPAs) is currently favorable and the volume of new NPAs is very low. Banks do not have to make special provision in respect of NPA due to which their profit is seen high.

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