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Banking, Finance & Insurance Sector – Q3 FY20 Results Analysis

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In this article, you will get the latest quarterly result updates of Banking, Finance and Insurance sector companies comprising in NIFTY 200. Updated as on 11th Feb, 2020.
Banking Finance Insurance Sector

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Banking & Financial Sector Analysis

Introduction

In this article, you will get the latest quarterly result updates of Banking, Finance and Insurance sector companies comprising in NIFTY 200. Updated as on 11th Feb, 2020.

We have already covered the Ready Reckoner of NIFTY 200 Stocks Q3 FY2019-20 results in our earlier article.

Detailed Stock Analysis by Invest Yadnya
Detailed Stock Analysis by Invest Yadnya

Here, the percentage growth year-on-year (YoY%) as well as quarter-on-quarter (QoQ%) for the Market Capitalization (Mkt Cap), Revenue and Net Profit (PAT) of Banking, Finance and Insurance sector companies in NIFTY 200 is given.

Sr. No.Company NameIndustryMkt Cap QoQ%Mkt Cap YoY%Revenue YoY%Revenue QoQ%PAT YoY%PAT QoQ%
1AU Small Finance Bank Ltd.Bank – Private26%33%8%41%11%100%
2Axis Bank Ltd.Bank – Private10%31%2%11%NA*7%
3Bandhan Bank Ltd.Bank – Private44%22%1%65%-25%121%
4City Union Bank Ltd.Bank – Private11%21%
5HDFC Bank Ltd.Bank – Private3%20%4%14%15%30%
6ICICI Bank Ltd.Bank – Private27%48%2%17%223%129%
7IDBI Bank Ltd.Bank – Private63%-9%
8IDFC First Bank Ltd.Bank – Private19%6%2%13%NA*NA*
9IndusInd Bank Ltd.Bank – Private14%7%2%26%-7%33%
10Kotak Mahindra Bank Ltd.Bank – Private2%34%-1%8%-3%28%
11RBL Bank Ltd.Bank – Private37%-28%2%36%24%-70%
12The Federal Bank Ltd.Bank – Private1%-4%2%14%6%33%
13Yes Bank Ltd.Bank – Private46%-72%
14Bank Of BarodaBank – Public34%44%0%46%NA*NA*
15Bank Of IndiaBank – Public15%25%2%7%-58%NA*
16Canara BankBank – Public70%11%0%0%0%14%
17Indian BankBank – Public6%-49%3%13%-31%62%
18Punjab National BankBank – Public61%44%2%6%-217%-304%
19State Bank Of IndiaBank – Public31%12%5%9%86%41%
20Union Bank Of IndiaBank – Public108%81%2%14%NA*261%
21HDFC Asset Management Company Ltd.Finance – Asset Management16%110%5%10%-4%45%
22Nippon Life India Asset Management Ltd.Finance – Asset Management34%123%1%-13%9%36%
23Housing & Urban Development Corporation Ltd.Finance – Housing12%-14%-12%37%-72%-37%
24Housing Development Finance Corporation Ltd.Finance – Housing22%22%-12%18%-73%-8%
25Indiabulls Housing Finance Ltd.Finance – Housing17%-63%-1%-20%-22%-44%
26LIC Housing Finance Ltd.Finance – Housing14%-11%0%12%-22%-1%
27PNB Housing Finance Ltd.Finance – Housing-24%-52%-7%0%-35%-22%
28Bajaj Finserv Ltd.Finance – Investment11%44%2%31%-2%39%
29Aditya Birla Capital Ltd.Finance – NBFC31%7%9%14%4%14%
30Bajaj Finance Ltd.Finance – NBFC11%67%11%41%7%52%
31Bajaj Holdings & Investment Ltd.Finance – NBFC-6%14%-26%-21%-51%-45%
32Cholamandalam Investment & Finance Company Ltd.Finance – NBFC3%21%3%24%27%22%
33Edelweiss Financial Services Ltd.Finance – NBFC14%-40%
34L&T Finance Holdings Ltd.Finance – NBFC42%-23%1%8%239%2%
35Mahindra & Mahindra Financial Services Ltd.Finance – NBFC3%-30%5%13%83%15%
36Manappuram Finance Ltd.Finance – NBFC32%92%9%30%-1%63%
37Muthoot Finance Ltd.Finance – NBFC13%49%
38Shriram Transport Finance Company Ltd.Finance – NBFC9%-7%-2%5%15%38%
39Max Financial Services Ltd.Finance – Others29%22%15%2942%129%5%
40Indiabulls Ventures Ltd.Finance – Stock Broking87%-46%11%53%-23%-14%
41Power Finance Corporation Ltd.Finance Term Lending24%10%
42REC Ltd.Finance Term Lending16%19%2%4%26%31%
43General Insurance Corporation of India Ltd.Insurance0%-12%-33%14%NA*NA*
44HDFC Life Insurance Co Ltd.Insurance4%61%5%14%-19%3%
45ICICI Lombard General Insurance Co Ltd.Insurance15%59%4%16%-4%23%
46ICICI Prudential Life Insurance Company Ltd.Insurance3%48%1%9%0%2%
47SBI Life Insurance Company Ltd.Insurance18%63%16%28%200%47%
48The New India Assurance Co. Ltd.Insurance27%-25%5%12%-8%NA*
Average Banking, Finance & Insurance Sector
 8%10%1%16%0%43%

Note : *The companies were in losses in any one of the periods considered for calculation purpose and hence percentage change cannot be calculated in such cases.

Sector Update – Banking, Finance and Insurance

Banking, Finance and Insurance sector is in focus after recovery from IBC resolutions increasing earnings, improvement in asset quality, low slippages and better ratios. Loan growth still is a bit disappointing as seen from RBI’s macro data.

Key Findings
  • SBI, ICICI Bank are the outliers as their recoveries are higher than 90% from entities like Essar Steel, Ruchi Soya, Prayagraj Power and some mid-sized accounts.
  • Most large private sector banks have full tax benefit coming into the earnings, as they fully marked down DTA (deferred tax assets) last quarter.
  • Slippages in accounts like DHFL, Cafe Coffee Day (CCD), Cox & Kings etc has washed out positive impact of IBC resolutions to an extent. Most of the banks reported a sharp rise in slippages, especially from the corporate loan book.
  • The banks also have to create provisions for exposure to Telecom sector looking at the stress that is build up.
  • It can be clearly observed from the numbers that the credit growth has considerably slowed down in this quarter and could have impact on margins/earnings. The average revenue growth for this sector was just 1.8% QoQ and around 15.1% YoY. Weak vehicle sales and moderate housing volumes could be reasons for this.
  •  Most of this is driven by growth is retail loans at around 16% YoY. So, retail growth shouldn’t worry most of the banks.
  • HDFC Ltd has recognized a fair value gain of Rs.90 Billion on de-recognition of investment in GRUH in Q3 FY20.
  • Kotak Mahindra Bank’s changing mix towards retail is helping improve overall margin improvement.
  • Among AMCs, HDFC AMC is the largest in terms of size. It is noteworthy that Nippon AMC has been able to stop the decline in AUM.
  • Merger benefit are gradually flowing in with Bank of Baroda currently on Operating Expenditure (OPEX), while other parameters continue to be low especially loan growth, margins and provisions.
  • Talking about NBFCs, funding still is a challenge and growth has been affected due to this, though large players continue to enjoy a disproportionate access to funds.
  • As competition from banks exists, growth in the core home loan has remained a challenge for Housing Finance Companies (HFCs).
  • Most of the insurance companies have posted a flat growth this quarter except SBI, whose profit jumped about 47% YoY.

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