By Akshay Jain
There is one basic thing to understand about the banking sector, no matter how bad their loans have turned, if the company is earning the regular net profit even after creating sufficient provision every year, banks will be throwing positive EPS to the investor. However, this doesn’t understate the importance of NPA that banking sector is going through. Going forward issuing loans & advance shall be more on the cognizant basis.
As far as the EBIT for banking sector (Interest earned – Interest expenses) is increasing every year, banks will be in a good shape. That’s an Optimistic view towards the banking industry.
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