After a solid start, the profit of the treasury can weaken for banks in Q2

Mumbai: Treasury Winins, who helped compensate for the impact of Gedempte Credit growth and to stimulate bank income in the three months to June, could considerably delay in the second quarter in the midst of rising yields and because of the absence of open market activities (OMO), said analysts.

The return of 10 years, which was softened to 6.25% last quarter, rose to 6.60% in the second quarter. Treasury yields are reversed reversed to bond prices. The hardening of revenues therefore has an adverse effect on the income of the bank’s investment investments.

Moreover, the Reserve Bank of India (RBI) did not carry out open market activities (OMO) in the second quarter. In the first quarter, the £ 2.4 Lakh Crore Omo -purchased banks helped to make a profit in their bond portfolio.

“Treasury -winsts in Q2 are expected to be lower than Q1 for two reasons – higher yields and absence of Omo’s. Returns moved in Q2, and Q1 also had omos. If there is a Omo with a large buyer such as the central bank, profit banks of their bonds would be dan,” “Tup1,” Tupta, “Terasury,” Terasury, “Terasury,” Treasury, ICRA, ICRA, ICRA.

When the RBI carries out an OMO purchase, it buys government bonds, pushes their prices up and yields. Banks that already have these bonds can then sell at higher prices and make the profit of the treasury.

“Stock position of the win has fallen in the balance sheet and therefore the profit that would be made will also be lower,” said Gupta.

Bumper 1q profits
In the first quarter, the winnings of the Treasury for Axis Bank increased by 245%, while Icici Bank saw an increase of 103%. Bandhan Bank and Bank of Maharashtra saw one year after year rise of 696% and 305% respectively. HDFC Bank saw an increase of 242% in its net trading book, while SBIS book grew by 144%.

“This quarter there would be busy and perhaps some mark-to-market losing in Treasury books, but it is difficult to gain access to the quantum. We will see which institution has a smart treasury team when the Q2 results are announced,” said a treasury head at a medium-sized bank.

Banks are also able to relocate some effects from the book Held to Maturity (HTM) to their available Breeding (AFS) book in Q1 and the decrease in returns, together with Omos helped banks in Q1 in Q1 in Q1

“Banks have the opportunity to switch from AFS to HTM to HTM in Q1, which helps them to make a profit. This option is not available in Q2, and they miss extra profit, said Asutosh Mishra, head of BFSI analyst at Ashika Stock Broking.” Losses are difficult to predict, but the profits would be filled in, “he said.