Mutual Fund

Large private banks set to gain big amid NBFC turmoil, rising rates: MS

Large private sector banks in India are well-positioned and look set to dominate the Indian financial industry going ahead  feels Morgan Stanley. The global financial services firm noted in its research report that the changing industry dynamics viz higher rates and NBFC turmoil are set to improve large banks’ positioning even more. That apart, better retail funding bases and digitisation initiatives are other key favourables for large banks. These banks were doing well, but liquidity advantage should fuel further acceleration in PpoP (pre-provision operating profit) growth, it said. The firm also noted that state-owned banks have excess liquidity but are unable to lend given low capital They too stand to benefit from the changing situation if growth capital is infused, it feels. The only large public sector bank it is overweight on is State Bank of India (SBI).

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