Banks set for steady Q4 performance

CREDIT GROWTH ROBUST, ASSET QUALITY STABLE, BUT MARGINS SHOW LIMITED UPSIDE

- KSHIPRA PETKAR

THE INDIAN BANKING sector is expected to report a steady and resilient performance in Q4FY26 (Jan-Mar), supported by healthy credit demand, stable asset quality, and improving operating efficiencies.

However, due to persistent macroeconomic uncertainties, brokerages’ pre-earnings reports suggest the quarter will likely see limited upside from margins and treasury income.

Systemic credit growth remains robust at around 13.5-13.8% year-on-year (YoY), driven by a consumption-led recovery and sustained retail demand. In contrast, deposit growth continues to lag at around 10.8-11.5%, leading to an elevated credit-deposit (CD) ratio of nearly 83%.