Why Morgan & Deutsche bet on Indian Private Banks to Play Recovery ?
With the underlying Economic indicators showing signs of recovery, a comprehensive analysis of Indian banks’ profitability matrices, suggests that asset quality stress tests and near-term strategies, present three key takeaways: 1) Private banks are well positioned, with the capital and liabilities to benefit from an economic recovery. 2) Lack of capital is a challenge for PSU banks, whose urgent need for equity dilution may keep valuations subdued even as the economy improves. 3) Capital inefficiencies may keep valuations down for PSU banks, whereas valuations could expand for private banks due to better capitalisation.
PSU banks have lost their core (more…)
