Private sector lenders foresee increase in loan demand post elections

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Private sector lenders foresee increase in loan demand post elections
As per a Reuters report, two of the private lenders, including ICICI Bank and Axis Bank who beat the street estimates for the Q4 FY 2014, with an upbeat 15% and 18.5% increase in net profit, are foreseeing a spurt in demand on the loan front soon after the general elections end. Bankers see a revival in investment plans by corporates and also an improvement in its asset quality which has been languishing in the current financial year.

With the hopes of Narendra Modi led government to come in power, business community expects better economic and corporate outlook in the coming times which shall help in tiding away with the current economic slowdown. Commenting on hopes of a pick up in demand for loan Chief Executive of Axis Bank, Shikha Sharma has been quoted in the Reuters report saying, "The expectation is that when the uncertainty of the elections is behind us, then maybe risk appetite will come back and people will start to invest. That's when you would expect to see any pick up in demand," she said. "As far as the economic cycle is concerned, we think the worst should be behind us."

The non-performing assets of both the banks, as with the overall industry, amid sluggish economic outlook further deteriorated in comparison to last year. Chanda Kochhar in the Reuters report on the NPA front has been quoted saying that ICICI Bank was at its peak of bad loan additions.The two banks expect their loan book to grow at an increasing rate as against the rate at which the total industry foresees its loan book or credit disbursal to grow.

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