Banks' good run on, but there are challenges

Net profits grew, but operating profits were down for many banks in the Sep quarter. What does it say?

- TAMAL BANDYOPADHYAY

One more reasonably good earnings quarter for Indian banks, with the quality of loan assets remaining pristine.

Net profit of every bank may not be handsome-some have even posted a drop in net profits - but for the first time, the collective net profits of listed private and publicsector banks (PSBs) crossed the 1.5 trillion mark in the September quarter of 2025-26. At 1.51 trillion, it was up 4.4 per cent year-on-year (Yo-Y). Quarter-on-quarter (q-o-q)-in the September quarter over the June quarter-the net profits of this set of universal banks was up 3.98 per cent.

Barring two PSBs, the banks that reported a drop in net profits Y-o-Yand even Q-o-Q in some cases-are all from the private sector. The quantum of drop in net profits varies, and so do the reasons behind it from higher provisioning for taking care of pockets of stress to slower growth or drop in income, both interest income and the so-called other income, including fees and treasury profits. IndusInd Bank Ltd was the only entity which posted a loss in this quarter.

State Bank of India (SBI) topped the list with a 20,160 crore net profit, followed by HDFC Bank Ltd (18,641 crore), ICICI Bank Ltd (12,359 crore) and Axis Bank Ltd (₹5,090 crore). These banks formed the ₹5,000 crore-plus net profit earning quartet in the September quarter. Four banks among the PSBS -Punjab National Bank, Bank of Baroda, Canara Bank and Union Bank of India-recorded net profits of over 4,000 crore. And two-one PSB (Indian Bank) and a private bank (Kotak Mahindra Bank Ltd) formed the ₹3,000 crore-plus net profit club.

All figures are rounded off.

While the net profits rose, the operating profits dropped-both Y-oYand Q-o-Q-for the industry.