Thread by @ithoughtadviser

The banking sector has been an underperformer since COVID. What makes it so interesting now? (1/8)

#bankingsector #COVID19 #investing

The banking sector is the backbone of our economy. The health of our banks has always played a major role in our economic growth journey. (2/8)

#india #economy #banks

With the introduction of the Asset quality review in FY15-16, banks' asset quality has been under pressure. This was further aggravated by events such as demonetisation, GST, and the IL&FS crisis. As a result, the GNPA ratio for Banks rose to 11.2% in FY18 vs 4.3% in FY15. (3/8)

Since FY18, GNPAs have witnessed a gradual moderation supported by healthy recoveries via IBC and an improvement in the Corporate NPL cycle. (4/8)

#npa #rbi #banks

As the banks focused on cleaning up the balance sheets GNPA’s started moderating to 6.9% in Sep’21 from 11.2% in FY18, despite the impact of the pandemic. (5/8)

#npa #rbi

The efforts of the banks were clearly visible, reflecting in the provision coverage ratios. The banking system made total provisions of Rs.16.5Lk Cr. over FY16-21 (3.4x higher) vs Rs.4.9Lk Cr. over FY06-15. (6/8)

#banking

What we are witnessing is an improvement in asset quality ratios similar to what was seen over FY02-06. It is further expected to improve. (7/8)

#psubanks #privatebanks

Comfortable provisioning, the decline in credit costs, decrease in GNPA’s and improving profitability makes the private and public banks look extremely attractive. (8/8)

#npa #banks #rbi