Banks, NBFCs set to reverse underperformance in 2022, say analysts

Jefferies is bullish on HDFC Bank, ICICI Bank, SBI, and HDFC.

Backed by attractive valuation, expected pick-up in credit growth, decline in credit costs, and stronger balance sheets, Indian bank and non-bank finance companies (NBFCs) may reverse their underperformance in the new calendar year 2022, say analysts.

So far in 2021, the Nifty Bank index has rallied 18.6 per cent on the National Stock Exchange as against a 25.2 per cent gain in the benchmark Nifty50 index, data show. The Nifty Financial Services index, meanwhile, is up 19.4 per cent YTD. However, during the past one month, the Nifty Bank declined 4.9 per cent on the NSE relative to the Nifty's 2.8