Bank stocks opened high in early trade today and moved the benchmark indices upward. The NSE Nifty 50 went up by 60.10 points or 0.34% and the Sensex went up by 57,153.98 points or 0.28%. Results for Q3 2021 are being released and most banks have done well.
While corrections are happening in the market due to fear of the US Fed tightening its policies, and geopolitical tensions between Europe and Russia, bank stock prices have been increasing. On the domestic front, the forthcoming Union Budget and the monetary policy review by the RBI (Reserve Bank of India) have been influencing the market.
Most banks have done well, in the December quarter pushing the Bank Nifty index high. It gained 1.91% or 716.60 points and was at 37,664.15 points. Some of the top performers are Axis Bank, Bandhan Bank, RBL Bank, Federal Bank, SBI, IndusInd Bank, PNB, IDFC First Bank, AU Small Finance Bank, Kotak Mahindra Bank, and ICICI Bank.
Axis Bank:
In Tuesday’s session, Axis Bank’s shares rallied over 6% on the BSE and were being traded at Rs. 750 apiece. The bank’s standalone net profit for the December quarter tripled to Rs. 3,614 crores against Rs. 1,116 crores in December 2020 quarter.
Its net interest income grew 17% to ₹8,653 crore due to a marginal expansion in the Net Interest Margin (NIM) to 3.53% and a 17% loan growth.
Motilal Oswal and Emkay Global Financial Services have maintained their buy rating on the bank stock and has given a target price of Rs. 975 per share and Rs. 1,020 per share, respectively.
Federal Bank:
The bank’s shares were trading more than 2% higher at Rs. 93 apiece on Tuesday afternoon on the BSE. Federal Bank reported a 29% rise in its standalone net profit. It reported a profit of Rs. 521.7 crore as compared to ₹404 crores in the same quarter last year.
Its net income interest grew by 7% year on year, while its net interest margin was at 3.27% during the December quarter. Overall, its asset quality has improved and NPAs (Non-performing assets) reduced from 3.24% to 3.06% quarter on quarter (QoQ).
ICICI Bank:
On Saturday, ICICI bank reported a 25% year on year (YoY) increase in its standalone net profit at Rs. 6,194 crore and a 23% jump in its net interest income from Rs. 9,212 crores to Rs. 12,236 crores year on year (YoY). Its net interest margin has reduced from 4% in the September quarter to 3.96 in the December quarter.
Net interest income (NII) is the difference between the interest earned by a bank and the interest paid by a bank.
Net interest margin (NIM) is calculated by dividing the NII by the average income earned from interest producing assets.
