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Nomura’s Top Bank Picks for Q1: ICICI, SBI, Kotak, and Federal Bank

Global brokerage firm Nomura has highlighted ICICI Bank, SBI, Kotak Mahindra Bank, and Federal Bank as its top picks in the banking sector ahead of the Q1FY25 results.

Key Points:

  • Top Picks: ICICI Bank, SBI, Kotak Mahindra Bank, and Federal Bank.
  • Ratings and Target Prices:
    • ICICI Bank: Buy, Target Price ₹1,335
    • Kotak Bank: Buy, Target Price ₹2,000
    • SBI: Buy, Target Price ₹1,000
    • Federal Bank: Buy, Target Price ₹195
  • Growth Expectations:
    • ICICI Bank and Kotak Mahindra Bank: Expected to report over 16% YoY loan growth.
    • Federal Bank: Notable for strong loan and deposit growth among mid-sized banks.
    • SBI: Expected to maintain strong loan growth of 16% YoY.

Loan-to-Deposit Ratios (LDR):

  • The chosen banks have the lowest LDRs among Nomura’s coverage.
  • Banks with higher LDRs have shown slower loan growth trends.

Net Interest Margins (NIMs):

  • Private Banks: Expected to see gradual NIM compression due to moderation in CASA and re-pricing of term deposits.
  • PSU Banks: Expected to see lower QoQ NIM moderation, supported by re-pricing of MCLR linked loans and stable LDRs.

Nomura’s analysis indicates these banks are well-positioned for growth and stability in the upcoming financial quarter.

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