BFSI Q4 Earnings Preview - Revived Business Growth Momentum; Asset Quality Narrative Key: ICICI Securities
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ICICI Securities Report
Business updates released for financiers in Q4 FY21 suggest revived business growth momentum, both on credit (3-6% QoQ growth) as well as deposit front (510%).
However, key to watch out for in Q4 FY21 earnings would be -
1. Actual stress tagging and reported gross non performing assets - though not much deviation is expected from pro forma NPAs;
2. provisioning build-up (both on incremental stress and contingency, if any);
3. narrative on Covid-19 second wave impact – financiers will be conservative in not utilising the contingency buffer; and
4. how benefit of funding cost and portfolio mix shift offsets interest on interest reversal and lower credit-deposit ratio.
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