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Q4 just a trailer of covid-19 impact for banks, an unsure script awaits

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In normal times, past performance gives an indication of what to expect in the future. This time, however, the covid-19 outbreak has made the past irrelevant and, hence, investors of Indian banks are likely to look through the fourth quarter (Q4) results.

Since the lockdown to contain the covid-19 spread came into effect in the final week of March, the quarter is unlikely to show the full impact.

Nevertheless, Indian banks are expected to report a drop in net profit for Q4, as loan growth was subdued and corporate insolvency resolutions slow. Click here to enlarge graphic Emkay Global Financial Services Ltd analysts estimate a 7% drop in net profit of private sector banks on an aggregate basis.

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