According to Motilal Oswal, the impact of the Reserve Bank of India’s (RBI) 50 Basic points (BPS) rate in June on the credit lock of banks will be fully reflected in Q2FY26, while the moderation of the costs of funds will take place with a delay | Photocredit: Bluestocking
Banks are likely to report the Gedempte Winning Growth in Q2FY26, largely due to lower profit and falling net interest rate (NIM), analysts say.
According to Motilal Oswal, the impact of the Reserve Bank of India’s (RBI) 50 Basic points (BPS) rate in June on the lending of banks will be fully reflected in Q2FY26, while the moderation of the costs of funds will take place with a delay.
“It is therefore estimated that NIMs contract for most banks in our coverage. We estimate sharper NIM decreases for Bandhan Bank, Equitas, AU SFB and Axis Bank, while RBL Bank is the Uitbijter with NIMS that is expected to improve somewhat. Quarter, “the breaking in the letters,” De Broksel said.
Further cuts
Brokerage company CLSA expects NIM to fall successively for most banks with around 10 BPS. Unless the RBI further reduces the repo rates, the brokerage expects NIM to go out in Q2.
“The drivers of the variance in NIM compression are the timing of tariff reduction due to passage, quantum and timing of SA (savings calculation) cuts and share of repo-linked loans. The top 3 private sector banks and the large PSU banks have reduced SA rates in June in June.
According to Systematix, it is expected that the income of banks will witness an increase in an increase in improving progress. In view of the fact that Benchmark 10-year-old G-EC yields have been improved on average for the quarter with 10 BPS (in 2QFY26 versus 1QFY26) versus -38 BPS (in 1QFY26 versus 4QFY25), the quantum of trade winsts is likely to continue. The period G-SEC has risen by 25 BPS from June-September 2025.
Delinquencies
Motilal Oswal said that uncovered delinquencies will remain increased, even when most lenders have suggested an improving trend in monthly collective efficiency in the microfinance segment. Select segments such as micro leadership against real estate, commercial vehicle and affordable homes have seen stress in selected bags, and the comments of banks on the general outlook for asset quality will be viewed.
“Moreover, with selected northern and eastern states that witness floods, a marginal increase in stress in MFI, micro-lap and MSME segments. We expect that private/psu benches controlled credit costs, while medium-sized benches with a higher provision of stretching, the stretching, will be impaired, the stretching, the stretcheds impaired, impaired disease, IMFI-SEGMENTENTERTERINGEN, IMFI-SEGMENTENTERTERINGEN, IMFI-SEGMENTENTERTENT, IMFI-SEGMENTENTERINGEN, IFI-Segmens. Brokerage.
Published on October 6, 2025
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