JPMorgan has released a report focusing on Indian banks and NBFCs, highlighting its top picks, which include ICICI Bank, State Bank of India (SBI), Shriram Finance, CIFC Asset Management, LIC Housing Finance, Kotak Mahindra Bank, and HDFC AMC.
The report notes that while rate cuts could negatively impact net interest margins (NIM) in the short term, these cuts are expected to be passed on over an 18-month period. JPMorgan also anticipates that regulatory tightening will prioritize stability over growth for the foreseeable future, which could place further pressure on bank earnings.
Banks may face near-term challenges due to slower growth, with earnings expected to remain under pressure. Non-banking financial companies (NBFCs) could benefit from rate cuts but also face concerns such as spread widening due to tighter liquidity and reduced bank lending.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Please consult with a financial expert before making any investment decisions.
