Banks to see margin pressure amid hike in deposit rates; IndusInd Bank, Axis Bank to defend NIMs better: Jefferies
Since December 2021, most Indian banks have taken a 170-210 basis points (bps) hike in their term deposit rates, with larger private banks and State Bank of India (SBI) taking hikes of around 170-210 bps, whereas smaller private banks have taken lower hikes of 150-170 bps.
With the rising interest rate environment, most Indian banks are likely to see some pressure on their net interest margins (NIM) over the next two to three quarters. However, analysts expect the trends to be divergent as banks with higher share of wholesale deposits and reasonable hike in MCLR over six months may be able to defend NIMs better than others.
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