Commercial Banks: 3QCY25 Universe earnings to go up 3%QoQ – By Taurus Research
- We expect 3QCY25 TSL Banking Universe earnings to grow 3% on a sequential basis on account of margin expansion (due to lower cost of funds) and continuing ECL reversals. On a YoY basis, earnings are likely to dip 2%. Accordingly, 9MCY25 PAT is expected to grow 3% only over the SPLY.
- Despite the relatively stagnant asset yields, Net-interest income growth for our coverage banks is expected to arrive at 4% for the quarter, driven by the uptick in margins mainly due to lower interest expenses on the back of overall lower cost of funds. We at tribute the same to: i) the robust build-up in current accounts CYTD across the industry; ii) substantial re-pricing of term de posits close to the current rates (specially in case of BOP); and iii) an expected dip in OMO based borrowings during 3QCY25.