Results Q3FY19: Review of banking sector

The results season creates quite a buzz in the market. Everyone even remotely related to the market keenly waits and watches results announcements. As the results are still coming in, let us give you a snapshot of what happened to the bank stocks, both private and public that have posted their December end results up until January 29, 2019.

We have analysed the earnings of eight banks, viz, Bank of Baroda, Axis Bank, RBL Bank, Yes Bank, Kotak Mahindra Bank, HDFC Bank, Federal Bank and IndusInd Bank, from January 1 to 29.

The aggregate interest earned by these banks stood at Rs. 79,022.03 crore. The highest contributor to this is HDFC Bank with Rs 25,890.26 crore, followed by Axis Bank with Rs. 14,129.73 crore. However, the bank to deliver the highest growth YoY in terms of the interest earned is Yes Bank and RBL Bank at 57 per cent and 42 per cent, respectively. In contrary, Bank of Baroda displayed the least expansion in terms of interest earned on a YoY basis as it stood at 14 per cent.

In terms of the net profit, HDFC tops the list with Rs. 5,585.9 crore, followed by Kotak Mahindra Bank whose net profit was at Rs. 1,822.8 crore. In terms of PAT growth on a YoY basis, Bank of Baroda jumped substantially by over 300 per cent, followed by Axis Bank at 131 per cent. The only bank of the lot to have delivered a 7 per cent PAT de-growth is Yes Bank.

Much depends on the results of this season for the PSBs as the RBI is eyeing their performance before announcing which of them will have lending curbs eased. Also, the government has specified to state-run banks that it will come to a decision about the infusion of over Rs. 54,000 crore into PSBs as soon as their results for the December quarter are out by February.

Below is the table portraying the stock movement and the returns fetched by each of these 8 banks for the period of 1-month and 3-months. In January, the earnings have reflected upon the stock's returns with IndusInd and Federal Bank shedding over 7 per cent each, while Yes Bank giving the highest return of about 12 per cent in the same period on the back of the appointment of new MD & CEO.