Bank profits set to moderate in FY26 as bad assets rise

Ind-Ra sharply revised down its FY25 system credit growth estimate to 13-13.5% from 15% earlier

- PTI

Increase in bad assets will impact banks' profitability in FY26, a domestic rating agency said on Tuesday. Indian banks' profitability is at an "inflexion point" in FY25 and is likely to moderate further in the fiscal afterwards, India Ratings and Research (Ind-Ra) said, adding that FY24 was the peak for profits.

"Profitability is expected to moderate further in FY26 with an expectation of rising slippages and higher credit costs over the FY24 levels which was at decadal lows," the agency's head and director financial institutions Karan Gupta told reporters here.