Goldman Sachs sees more value in owning private banks than PSBs

Rahul Jain, Co-Head of Asia Financials and Head of India Research at Goldman Sachs, highlighted that private banks have made significant gains in market share despite a strong resurgence by public sector banks (PSUs) in terms of capital ratios and balance sheets. He emphasized the continued value in owning private banks over PSUs currently. \r

Jain acknowledged PSUs' improvements in return on assets (RoAs) over the past few years, which have boosted their valuations. However, he noted that the valuation gap between private and PSU banks has considerably narrowed. \r

Previously, Jain had downgraded financial sector earnings due to concerns such as elevated cost of funds, rising consumer leverage, and operational expenses, suggesting certain private banks are better positioned in the current market scenario.