Mideast war puts Indian lenders at risk, insurers less exposed, says Jefferies

Bank of Baroda

12/03/2026 04:48

* Jefferies says extent of impact of Middle East conflict on Indian financials will likely be divergent

** Warns oil price surge could hurt oil firms' production capacity, cashflows, which will hurt bank credit demand; SME lending, overseas portfolios at risk, especially for mid-size banks

** Adds, microfinance lender AU Small Finance Bank AUFI.NS as well as India's top lender SBI SBI.NS expected to be hit due to high Mideast exposure

** Estimates 5% revenue and credit cost change could cut large banks' FY27 earnings by 7-10% and 1-2%, respectively

** NBFCs face asset quality, growth risks from higher funding costs, but sector valuations near recent lows

** Notes lower risk for insurers, fintechs; asset managers vulnerable to AUM, cash-market volume declines

** BSE BSEL.NS, Groww BILO.NS may benefit from volatility-driven options activity despite securities transaction tax hike, tighter liquidity

(Reporting by Urvi Dugar in Bengaluru)

((UrviManoj.Dugar@thomsonreuters.com;))