Bank Stocks: 'Buy, Buy, Hold...' Jefferies Shares 2025 Ratings On Major Indian Banks - See Targets

Jefferies has defined the year 2025 as the Year of Easing for Indian Banks as RBI's effort to manage risks have narrowed gap in loan and deposit growth, slowed unsecured loans and even GDP growth, the financial services company said in a report.

According to the report, loan growth is going to slow to 11-13 per cent that drives some EPS cuts.

Additionally, rates may fall by 60 bps & see easier or more stable norms and asset quality cycle may be shallower and therefore ease for big banks in the financial year 2025-26 (FY26).

What Are The Triggers For Potential Easing?

The Reserve Bank of India was concerned with high growth in unsecured loans, banks lending to NBFCs, wide gap in growth of loan (16 per cent) and deposit (13 per cent), high inflation as well as operational gaps at banks and NBFCs at the beginning of 2024.

But by the end of the year many of these issues were addressed with unsecured loan disbursements. further, NBFCs and banks are also trying to fix issues flagged by RBI.

Asset Quality May Ease In FY26

According to the report, there has been a divergent rise in asset quality pressure, especially from unsecured loans and lenders with focus on upper-tier clients have faced lower pressure than NBFCs and smaller private banks that focus on lower tier clients.

Additionally, SME loans is an are to watch and the pick-up in GDP growth will be key.

The report also noted that pressure in unsecured retail loans is going to ease in the financial year 2025-26, as provisions on stress is taken upfront and disbursal has slowed.

The Jefferies Report also shared its credit ratings on several Indian banks: