Credit Suisse raises earnings per share estimates for top banks by 6-15% for this fiscal

First, the net interest margin (NIM) yields on all loans are increasing because they are linked to external benchmarks, such as repo, and these loans are giving banks around a 140-190 bps increase. Most of the loans they have given have also been retail.

In terms of deposit, the costs have not reduced much. The retail deposits, which are maximum one-year deposits, have gone up by only 40 bps, compared to the increase in the loan rates. Only the bulk deposit rates have gone up and they don't constitute a big share for banks.

The loan growth itself is strong at 15 percent, led largely by retail and SME. Within retail, these are high-yielding loans. Thirty percent of retail loans are constituted by unsecured loans.

The report notes that private bank credit costs are lower by 50 to 70 basis points, even compared to the normal levels. This is because corporate deleveraging has been high. The number of companies where EBITDA does not cover interest is at a historic low, which means corporate balance sheets have become robust. This is why the brokerage has cut credit costs for banks by 5 to 20 bps.