Private sector banking stocks will continue to see an upside: Vijai Mantri

In a chat with ET Now, Vijai Mantri, MD & CEO, Pramerica Mutual Fund, shares his views on banking sector.

ET Now: PSU banks are suffering because of NPA concerns but why are well managed private banks suffering?

Vijai Mantri: If you see result of couple of leading private sector banks first time they have seen some pain on the NPA front and there has been a concern on the rising NPA.

The second thing is that these banks are largely owned by FII or their holding is pretty high in these banks and if you see last few week or so, the FII has been sellers. So these banks may had money for these guys and they were available at very high valuation compared to the public sector banks.

We still believe that the private sector bank will continue to deliver superior investments performance for the investor because they do not have large corporate book, many private sector banks do not have a large corporate book.

The CASA balance is very good and earlier when you could put over night money at 4% and 4.5% to 5% and you pay 4% of the CASA balance, now the overnight money you can put at 7.5%-8%. So for these guys, bottom line is going to improve quite significantly so we believe that within the private sector banks well managed private sector bank will continue to do well.