Experts are saying that the growth momentum will remain in the banking sector. After the quarterly results, he is also giving investment advice in some banking stocks.
Best Banking Stocks: The earning season for the December quarter of the current financial year is almost nearing completion. The financial performance of public and private banks improved quarter-on-quarter and year-on-year in the December quarter. The work of the banking sector is now coming towards the pre-covid level. If loan growth improves, asset quality is also improving. While deposits have improved, retail, SME and corporate businesses have strengthened. Brokerage houses and experts are talking about the continuation of growth momentum in the banking sector. After the quarterly results, he is also giving investment advice in some banking stocks. Here we have given information about Public Sector Bank Bank of Baroda and Private Sector Bank City Union Bank.
Bank of Baroda
Brokerage house Motilal Oswal has given investment advice in Bank of Baroda of PSU sector. A target of Rs 150 has been given for the share. In terms of the current price of the stock Rs 107, it is expected to return 41 percent. The brokerage says that the solid PPoP growth in the bank has been 22 percent year-on-year. There the provision has decreased. The brokerage says that the earnings performance of BOB has been strong. The quarterly performance of the bank has been better due to better net interest income. Domestic net interest margin grew 31bp to 3.2 per cent on a quarterly basis. The asset quality ratio of the bank has also improved. The brokerage house has projected 11 per cent and 13 per cent growth in earnings for FY22E-24E. At the same time, it is advised to invest in the stock with a target of Rs 150.
The bank has made a profit of 2200 crores in the December quarter, which is better than the estimate. Conso PAT has grown by 106 per cent year-on-year to Rs 2460 crore. Other income has a 13% year-on-year growth. However, it has been affected due to lower treasury income. Advances have seen a 5.5% quarter-on-quarter growth. On a quarterly basis, there was a growth of 4.5 percent in Retail Loan, 6 percent in Corporate Book, 4 percent in SME/Agri Book and 5 percent in the quarter. Retail home and auto loans grew at 3.5%/6.8%.
City Union Bank
Brokerage house ICICI Securities, while recommending investment in City Union Bank, has set the target to Rs 200. The current price of the share is Rs 144. In this sense, it can give 39 to 40 percent return. According to the brokerage, Q3FY22 RoA is 1.4 per cent, which is close to normal. The speedpage is 270 crores which is the lowest level after the start of COVID 19. The uncertainty that was there due to COVID is now gone. The bank looks set for strong growth. Improvement in asset quality is a big positive sentiment. The total restructured account is 2200 crores. The bank has overcome the challenges of COVID strongly and is expecting better growth going forward.
(Disclaimer: Stock investment advice is given by the brokerage house. These are not the personal views of The Financial Express. Markets are risky, so take expert opinion before investing.)
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