Bank Nifty

Jun 24

Bank Nifty Chart Pattens

** Public sector banks' discount to private banks close to historic lows, Macquarie says, a positive for the latter

** Adds, State Bank of India's
SBIN
valuations compared to private peers Axis Bank
AXISBANK
and HDFC Bank
HDFCBANK
show discount is now 1-standard deviation below historic averages

** "There is a clear preference for private sector banks among financials," says Macquarie, citing steady earnings outlook as they will be less affected by Expected Credit Losses (ECL) regulations and carry contingent buffers

** Bottoming out of credit costs, likely impact due to regulations point towards lower return on assets, profitability for India' state-owned lenders, says Macquarie

** Last week, brokerage upgraded Kotak Mahindra Bank
KOTAKBANK
to "outperform" from "neutral", while also upgrading City Union Bank
CUB
and Bandhan Bank
BANDHANBNK

** India's Nifty private bank index (.NIFPVTBNK) up 3.63% so far in 2024, underperforming 8.3% rise in Nifty 50
NIFTY
index