Bank stocks likely to face pressure over next 2 quarters: Jyotivardhan Jaipuria

Banking sector is expected to face challenges in the next two quarters as net interest margins (NIMs) are likely to compress due to cost pressure and repricing of deposits. However, credit growth is expected to remain strong and non-performing loan (NPL) pressure will be weak, leading to low NPL provisioning. Jyotivardhan Jaipuria, Founder & MD, Valentis Advisors, prefers corporate banks over retail banks as they are relatively cheaper on the price-to-book basis and expected to see big earnings growth in the next few years.