NIM of 6 percent is not ethical banking at all. The way India is progressing, higher NIM would not be allowed by RBI policies for banks. IDFC is still running in NBFC model. Sooner or later they will have to change their policy of lending at higher rates.
The way many Banks(specially PSU banks) have started instant personal loan at lower rate , the way loan scrutiny and disbursal are being done digitally, the NIM has to come down for all banks in long run. The bank which will focus on high NIM would eventually grow slower with development of India. SO, In my opinion, Premium valuation of a bank on higher NIM would be a thing of past . Bank would be valued on asset quality (net NPA and GNPA) ,book value and offcourse growth. So, Federal Bank is undervalued for historical reasons which will change with time.
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