Mumbai : Profits of banking, financial services and insurance (BFSI) sector dropped by 3% in the second quarter of the current fiscal due to weak revenue growth and higher provisions, says a report.
According to the report by Kotak Institutional Equities, earnings were earlier expected “to move to the positive zone” during July-September quarter. “the sluggish performance was “led by weak revenue growth and high provisions”.
The report also noted that gross non-performing loans (NPLs) increased to 4.3 % of the advances.
The NPLs stood at 5.3 % for public sector lenders and 2.1 % for private banks. As per the report, large private banks have started indicating that the stress levels in their balance sheet are gradually easing.
It further noted that loan growth (under coverage) for the second quarter was the lowest in recent years at 10 per cent.
