Bank Profits to Slow in September Quarter as Bond Yields Rise
· Business · Economic Times, Bloomberg, Business Standard
Nifty 50 banks are expected to post 11.5% year-on-year growth in net interest income for the September quarter, according to estimates from ETIG and four broking firms. However, net profit growth will trail at around 10% due to treasury income pressure from hardened bond yields. The RBI's 2026 FCNR-B deposit swap scheme mobilised over $127 billion, bolstering deposit growth but potentially dragging down CASA ratios and net interest margins. Loan growth accelerated to 19.1% year-on-year, while deposit growth reached 15.8% year-on-year. Axis Bank and Kotak Mahindra Bank are likely to show substantial profit growth in this quarter.
Why it matters
Bank shareholders and investors face slower profit growth despite strong deposit inflows, with potential NIM pressure from FCNR deposits. Borrowers may see maintained credit availability as loan growth accelerates sharply.
Read the original report — Economic Times
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