In CNBC-TV18’s special segment 'Standout Brokerage Report', Nimesh Shah has a financial health checker report from Credit Suisse. The author of the report is Ashish Gupta.
Gupta believes that the clean-up will be extended to FY22. Credit Suisse is estimating 6 percent incremental stress of which 4 percent will be restructured.
For FY21, Credit Suisse has reduced the credit cost by 15-40 percent but for FY22, it has raised the credit cost by 20-60 percent. It is expecting a higher space for public sector undertakings (PSUs) and for small private banks.
The only comfort seems to be in the large private banks that have raised a lot of capital and have a capital buffer to absorb the credit cost. So it maintains an 'overweight' stance on the large private banks like Axis Bank, ICICI Bank and HDFC Bank.To watch other videos in this series, click the Standout Brokerage Report tab below.