Suggest to buy and hold PSU banks: Vinay Khattar

In a chat with ET Now, Vinay Khattar, Head Research (Individual Clients), Edelweiss Financial Services Limited, shares his views on the banking sector. Edited Excerpts:

ET Now: PSU banks. Is that a trade that you are advocating? In specific do you think, that six months down the line if not today,value would emerge in these banks?

Vinay Khattar: It is possible that the value may emerge in these banks. Our sense is that they will consistently remain underperformers. The NPA, restructured books,regulatory changes in which the restructured assets will have to be again reclassified as gross NPA leading to higher capital provisioning and other suchwill remain key of the issues which will be an overhang on the entire public sector banking space. In terms of trade based on fallen bond yields and economy which could cause traction in these banks, they could be reasonable trades. Overall if you were to just buy and hold banks, then it will make lot more sense to stick on the private sector side.