Bank Stocks Outlook for the week – 22 to 26.05.2017

Bank Stocks Outlook for the week – 22 to 26.05.2017

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Bank Stocks Outlook for the week – 22 to 26.05.2017 )

Bank stocks are expected to trade mixed in the coming week, with large-sized state-owned banks such as State Bank of India and Bank of Baroda likely to register gains. Most public sector bank stocks may see some consolidation at the current levels, as the earnings season for Jan-Mar comes to an end, while private sector lenders are expected to witness a correction. Private lenders ICICI Bank and HDFC Bank are expected to continue trading with an upward bias next week after reporting profits, despite an increase in their provisions for Jan-Mar. SBI is expected to continue its gaining streak next week after having reported a net profit of 28.1 bln rupees for Jan-Mar yesterday. During the day, stocks of SBI hit an over two-year high of 315.30 rupees on the National Stock Exchange after the lender reported strong growth in net interest income in Jan-Mar and its bad loans fell during the quarter. Earlier yesterday, YES Bank as its top pick in the mid-sized private banking space because of the bank's healthy capitalization, strong capital allocation, and market-leading growth rates. However, a few PSU banks that are grappling with high capital requirements amidst piling bad loans, are expected to trade weak. Banks such as Indian Overseas Bank, UCO Bank, IDBI Bank may trade with a downward bias subject to balance sheets, NPA numbers. Corporation Bank is set to declare its Jan-Mar results on Saturday while Bank of India will detail its numbers on Monday. Bank of India's earnings in Jan-Mar are likely to improve on a yearly basis, due to loan recoveries and healthy rise in non-interest income.

Source : Cogencis Information Services Ltd.