The report emphasized that four of the top six Indian banks achieved a decrease in the net result in the tax first quarter ending on 30 June.
Various Indian banks expect their net interest rate margins (NIMS) to improve in the second half of the current financial year after reporting a weak performance in the quarter of April-June, according to a report from S&P Global.
The income in the first quarter of FY26 were dragged down by a strong reduction in interest rates.
The report emphasized that four of the top six Indian banks achieved a decrease in the net result in the tax first quarter ending on 30 June. The fall was partly due to the decision of the reserve Bank of India to lower the interest rates of the benchmark with 100 basic points since the beginning of 2025.
Among the large lenders, State Bank of India (SBI) reported a net profit of £ 21,201 Crore in the April-June period, an increase of 9.7 percent on an annual basis. Icici Bank LTD, the largest bank in the private sector by market capitalization, also reported a strong profit with an increase in profit after tax after tax to £ 13,558 crore.
Other major lenders, including the state-run bank of Baroda and Punjab National Bank, together with private sector colleagues HDFC Bank LTD and Axis Bank LTD, have fallen according to the details of the S&P Global Market Intelligence data.
The margins also came under pressure in the quarter. SBI, the largest lender in South Asia per assets, reported NIM of 2.77 percent in the first quarter, compared to 2.99 percent a year earlier, while retaining the guidelines of around 3 percent. HDFC Bank saw its NIM slip to 3.94 percent of 4.06 percent. Punjab National Bank reported NIM of 2.43 percent against 2.76 percent in the quarter of a year ago.
On June 6, the reserve Bank of India reduced the share of deposits that banks are obliged to keep as cash with 100 basic points to 3 percent. This step is expected to release around £ 2.5 Lakh Crore of liquidity in the banking system by December.
In addition, the Central Bank also reduced its benchmark loan percentage by 50 basic points to 5.5 percent, which contributed to the reduction of 100 basic points since the beginning of 2025 to support economic growth.
In the meantime, some lenders reported a slight deterioration of the power quality and stepped up in the quarter. However, S&P Global noted that analysts do not anticipate a strong increase in non-performance loans, which remain at multi-year lows.
Published on August 28, 2025
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