Key Points
Goldman Sachs Group Inc. sees increasing headwinds for Indias banks, and expects their returns on assets to decline in the coming quarters...
Indian banks were in a Goldilocks period over the last couple of years, during which lenders improved their top line and enjoyed a pickup in loan growth, according to Rahul Jain, co-head of Asia Pacific Financials Research at Goldman..
We expect their ROAs to start moderating somewhat, he said in an interview with Haslinda Amin on Bloomberg TV on Tuesday...
But in the near-term, we see some consolidation happening in the consumer-retail space, because we see that household balance sheets are getting leveraged, he said.. Lenders are likely to experience slower growth due to potential asset-quality challenges, as the credit cycle plays out, which would impact their revenue margins and fee income, Jain said..
Goldmans view on Indias banking sector contrasts with research analysts from JPMorgan Chase & Co., which said in a note this week that Indias corporate lenders are the single largest opportunity among Asia Pacific financial stocks..
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