Indians banks are 'going nowhere', says Jefferies

Jefferies said fundamentals for India’s banking sector are unlikely to change much given “tepid” loan and deposit growth, “range-bound” net interest margins and “weak” asset quality.

“The reason to own/sell a stock then boils down to valuations,” Jefferies said in a report titled “Initiating on India Banks: Going Nowhere” and dated April 5.

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Jefferies started HDFC Bank, ICICI Bank and Bank of Baroda with “buy” ratings, but initiated State Bank of India with an “underperform” rating.

Assigned “hold” ratings to Axis Bank , Punjab National Bank and mortgage lender Housing Development Finance Corp.

Jefferies believed banks with strong branch expansion such as HDFC Bank, ICICI, and Axis could face smaller problems.

Reuters