Indian banks’ return on assets (RoA) is likely to slip to 1.15%-1.2% this fiscal from about 1.3% last fiscal, with Crisil citing lower treasury income and pre-emptive provisioning ahead of the expected credit loss framework as the key reasons.
Crisil said the decline in RoA should still leave the sector well above its 20-year average of 0.8% and 10-year average of 0.6%. The rating agency also said net interest margins are expected to remain stable at about 2.9% for the full year, even though they may soften from last fiscal’s exit level.
