A man looks out of a window next to the signboard of HDFC Bank’s automated teller machine (ATM) in New Delhi, India, May 5, 2023. REUTERS
BENGALURU, April 15 (Reuters) – Indian banks are expected to report a steady profit rise in the January-March quarter, four brokers said, aided by credit growth and liquidity buffers, while higher bond yields and forex arbitrage curbs weighed on treasury income.
Private banks are likely to report about 8%-12% on-year profit rise, with HDFC Bank and ICICI Bank scheduled to post their results on April 18.
State-run lenders may report an advance of about 2%, similar to the previous two quarters, aggregate estimates from Motilal Oswal, Jefferies, PhillipCapital, Elara Capital and Yes Securities showed.
Private banks’ higher core operating income should cushion margin pressure, while bond yields are expected to weigh more heavily on state-run banks’ treasury gains.
After a slow start to the fiscal year 2026, loan demand picked up in the third quarter.
The government’s move to cut goods and services tax encouraged people to spend more, while the Reserve Bank of India’s slashing of the cash reserve ratio gave banks more money to lend.
Top private lender HDFC Bank posted a loan growth of 12% in the March quarter, while ICICI Bank and state-owned State Bank of India could log 14.2% and 14.5%.
“We estimate banks to post around 12% to 13% loan growth in FY2027, aided by steady growth in retail and MSME loans and improvement in corporate loans,” said Vishal Narnolia, assistant vice-president, research, ICICI Securities.
However, in contrast to the first nine months of FY2026, yields hardened in the March quarter, which will limit banks’ profitability, said Narnolia.
Curbs on forex arbitrage further limited trading income at bigger lenders such as SBI, ICICI, HDFC and Axis Bank.
Quarterly updates from top lenders indicate a high-single-digit to low-double-digit jump in deposits, similar to the previous on-year quarter.
Strong year-end inflows and healthy traction in retail deposits are likely to aid deposits, according to brokerages.
The bank index fell 15.6% in the March quarter, slightly more than the 14.5% drop in the benchmark Nifty 50 index .
Reporting by Nishit Navin and Bharath Rajeswaran; Editing by Harikrishnan Nair
