Pvt banks see sequential fall in profit

Slippages in unsecured retail portfolios take a toll on private lenders' Q2 showing; elevated credit costs also hurt

- SUBRATA PANDA & ABHIJIT LELE

Higher provisions stemming from elevated slippages in unsecured retail portfolios weighed on the Q2FY25 showing of private-sector lenders, with their earnings declining sequentially.

In contrast, state-owned lenders have largely posted robust gains, with 10 of 12 public-sector banks reporting healthy quarter-on-quarter (Q-o-Q) rises in net profit, fueled by reduced provisioning needs and marked improvements in asset quality.

The country's largest lender, State Bank of India (SBI), along with Bank of India, is yet to announce Q2 earnings.

Data compiled by Business Standard reveals that private banks saw an 8.21 per cent year-on-year (Y-o-Y) rise in their net profit; however, sequentially, earnings declined around 4 per cent as provisioning costs rose significantly.

Net interest margins (NIMs), a key profitability indicator, had been under pressure for private lenders in Q2 amid elevated credit costs and intensifying deposit competition.

Notably, HDFC Bank and Axis Bank managed to maintain stable NIMs, though ICICI Bank saw a decline.