Axis bench

According to Brokerage, “The bank’s corporate loan payments increased 24% year over year, unchanged from last year. The middle business segment grew 32% yoy / 10% yoy access to sources of finance other than bank loans. Capex cycle has bottomed out and an increase could be postponed by 6-12 months. The festive demand has been strong, so working capital utilization (which has been good so far) should improve in the future, with payouts up 54% YoY and 54% QoQ. “

IIFL Securities said in its most recent report that “home loan disbursements were up 86% year over year and 54% year over year. The payments made by SBB rose by 103% compared to the previous year / 72% compared to the previous year. Personal loan payouts increased 72% year-over-year and 21% quarter-over-quarter. Credit card spending increased 54% year-over-year and 34% quarter-on-quarter and is trending above pre-COVID levels. The bank intends to have unsecured personal loans compared to the next few years. “

The brokerage firm claims that “management hopes to achieve structural improvement in NIM in the future due to i) an improvement in credit versus investment on the asset side, ii) a higher proportion of low-cost deposits, and iii) a reduction in RIDF- Bonds (which have a negative spread) as incremental allocations were suspended as the bank is PSL Compliant The bank had an SLR surplus of ~ 856bn Axis Bank’s restructured book was Rs44.6bn or 0.72% of the loans. AXSB has a PCR of ~ 24% on the restructured book, including 100% PCR for unsecured retail loans. The restructuring is not expected to exceed the current level (in% of loans). Of the total restructured loans are ~ 93% secured. LTV in the restructured private customer book was ~ 40-70%. Restructuring according to segments: i) Corporate at 0.68%, ii) Retail at 0.80%, SMEs at 0.02%. The non-fund exposure related to this book is Rs10.02 billion. “

Axis Bank Acquisition Proposes IIFL Securities

IIFL Securities found in its research report that “A strong liability business with a highly granular proportion of retail deposits (~ 83%) is the bank’s greatest strength. The bank is effectively leveraging its huge ~ 27M customer base to increase granular retail and SMB lending and rising fee income. We anticipate that AXSB’s operating costs will remain elevated in the near future, like other large private banks, to invest in technology and franchises to take advantage of new growth opportunities. Asset quality is stabilizing and lower borrowing costs should help. to the merit. “

The brokerage firm further highlighted that “the bank has strong Common Equity Tier 1 capital of ~ 15.8%, which should enable dilution-free growth in the years to come. Operating expenses up sharply (13.4% loss), led by a strong 24% growth in other operating expenses versus QoQ. Bank keeps COVID provisions on balance sheet and as economic outlook improves, borrowing costs may come as a positive surprise. As such, we recommend a BUY into the stock with a long-term goal of Rs. 970. “

ICICI bank

IIFL Securities in its research report noted that “Digital Sourcing has seen significant growth over the past two years. The digital contribution to savings, FD value, loan approvals and withdrawals, and card procurement was on 28/25/23/45 “. % or (as of Oct. 2021); these products recorded 1.5 to 2.3 times growth compared to the previous year. Various payment platform initiatives have resulted in a market share of +1% in volumes at UPI / NEFT / RTGS to 16/9/12%. , or for products like FASTag, the bank is striving to increase use cases such as fuel payments, parking fees, etc. “

According to Brokerage, “strategic priorities are: a) omnichannel customer experience across products and processes; b) capturing opportunities in the customer ecosystem; and c) efficiency and scalability. The bank has a clear focus on the company’s entire ecosystem for improvement.” to improve risk-calibrated core operational profits via products (payments, loans, liabilities, investments), value chain (employees, dealers / sales partners, sellers, investors, etc.) and opex minimization (digital, direct procurement, etc.) cooperation with fintech partners such as Saverisk, ePayLater , Porfios and Refyne to provide bespoke ecosystem solutions. A focused enterprise ecosystem approach resulted in a 2.3 / 1.3-fold growth in liabilities / operating profits and assets in fiscal year 2019. “

“Digitization and the improvement of compliance offer a great opportunity to increase the penetration of the SME business. This process is expected to accelerate with the account aggregator system. The bank offers a comprehensive platform for small businesses through: a) InstaBIZ app (likely to move to an open architecture soon); b) modular platforms with specific solutions; and c) Provision of BaaS with connections to fintechs. InstaBIZ has +1 million active customers with a market penetration of + 20% in cross-selling products, “added IIFL Securities.

ICICI Bank Says Buy IIFL Securities

The brokerage firm has claimed that “ICICI Bank’s analyst meeting focuses on providing a detailed understanding of a) the customer journey, from acquiring across channels to deepening relationships, to bespoke solutions and technology platforms that come together as one better risk management; b) partnership with fintechs to add the cake and provide solutions to customer needs; c) sole focus on risk-calibrated core operating income across all divisions Formalization / Increasing Compliance in Business. The analyst meeting strengthens our trust in ICICIBC to compete with fintech players with world class technology platforms. Its path to capture profitable market share in focused areas continues to gain momentum from Rs 949 / A ktie. “

Disclaimer of liability

The above stocks were selected from IIFL Securities’ brokerage report. Investing in stocks carries the risk of financial loss. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any damage resulting from decisions made based on the article.