October 4, 2017 / 6:31 AM / 10 months ago

BUZZ-Nomura sees value in Indian corporate banks vs rivals

** Nomura says sees value in corporate banks such as ICICI Bank, Axis Bank, adds they have underperformed the broader index and retail banks in the past 3-6 months

** “Many of the corporate banks we cover are trading in a value zone relative to their normalized ROEs (return on equity) and adjusted book multiples, hence we see value now in corporate banks,” the brokerage said in a note

** Says stressed-asset recognition cycle is nearing end although provisioning impact will continue into 2018/19 financial year

** Says prefers ICICI Bank and Axis Bank over state-run rivals as their ability to deliver growth beyond this credit cycle will be better

** Adds smaller state-run banks like Union Bank of India and Bank of India will continue to have capital constraints

** Nomura has “buy” rating on ICICI, Axis, Bank of Baroda (BoB), State Bank of India (SBI) and Punjab National Bank (PNB); “neutral” on Union Bank; “reduce” on Bank of India

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