Saturday, May 23, 2020

Which Bank to AVOIDE now ?

Recently RBI has extended loan moratorium till Aug 31,2020 on one-time restructuring, taking the total moratorium period to six months.
As  per our opinion, it will affects bank’s financials negatively. Borrowers are opting the moratorium mainly to preserve cash for future need; which will definitely affect the retail consumptions too.
We have gone through the April’s 2020 loan portfolio of major banks and % of borrowers base opting for this extended 6months moratorium is scrutinized for better understanding the Banking sector and its effect on our Banking Stocks.
Axis Bank has around 25-28 per cent of its loan book under moratorium as of April, while for ICICI Bank, about 32 per cent of the customers by value — both retail and corporate . 26 per cent of Kotak Mahindra Bank’s borrowers while 71 per cent of Bandhan Bank’s loan book by value is under the moratorium & State Bank of India has around 20 per cent of the bank’s borrowers opting for moratorium.
With more than 70% borrower’s opting for moratorium, Bandhan Bank will find hard to manage its loan portfolio with spike in NPA after August 2020.

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