HSBC has highlighted 2024 as a challenging year for the financial sector, marked by tight liquidity constraints. However, the brokerage expects liquidity conditions to ease significantly in 2025, which should support deposit growth and alleviate funding pressures.
HSBC also called for a breather from further regulatory tightening, as well as a reduction in asset quality headwinds, to unlock the full potential of the financial sector. Among banks, Axis Bank, HDFC Bank, and ICICI Bank are the brokerage’s preferred picks, given their robust balance sheets and strong market positioning.
In the NBFC space, Bajaj Finance and Shriram Housing Finance stand out as top recommendations, driven by their resilient asset quality and diverse product offerings. HSBC remains optimistic about the financial sector’s recovery trajectory in 2025, underpinned by favorable macroeconomic conditions and improved regulatory clarity.
