Sector : Banks

The banking industry is going through tricky times as treasury incomes fall and wage hikes loom large on the horizon. However, a pick-up in corporate credit in economy and a boom in retail credit, will surely see banks getting back to their core business of lending and accepting deposites. But it would be quite impossible for banks this fiscal to match up to last years high profits. Banking stocks have under performed on the bourses as well. With high inflation rates, real rates in the economy have turned negitive, making bank deposites on attractive as on investment option. If this persistes banks could face higher cost of funds in the future.