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Banks may report lower single-digit profit growth, margin compression
Business Standard
|January 09, 2026
Commercial banks are expected to register 2.4 per cent year-on-year (Yo-Y) growth in net profit for the third quarter — (October-December/Q3) of 2025-26 (FY26).
Public-sector banks (PSBs) are likely to report a marginal decline, while private-sector banks are expected to post 5.5 per cent growth, according to Bloomberg consensus estimates. On a sequential basis, banking sector profit is seen growing by 2 per cent.
Net interest margins (NIMs) may show a mixed trend during the quarter, as some banks could face margin compression following the 25 basis-point (bp) policy repo rate cut by the Reserve Bank of India in December. More than 40 per cent of loans at most banks are linked to external benchmarks such as the policy repo rate, which is revised immediately, while deposit repricing takes place with a lag.
This story is from the January 09, 2026 edition of Business Standard.
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