PSBs beat pvt peers in profit race

ASHARPER FOCUS on secured retail assets-particularly housing and vehicle loans - and limited exposure to unsecured segments such as microfinance, credit cards, and personal loans, and the early transmission of repo rate cuts that helped reprice deposits faster have collectively enabled public sector banks (PSBS) to outperform private banks in the December 2025 quarter (Q3FY26).

- MAHESH NAYAK

These advantages, combined with sustained improvement in asset quality and lower provisioning requirements, have strengthened PSBS' profitability and business momentum over the past several quarters.

A sharper focus on secured retail assets particularly housing and vehicle loans along with limited exposure to unsecured segments such as microfinance, credit cards, and personal loans, coupled with the early transmission of repo rate cuts that helped reprice deposits faster,have collectively enabled public sector banks (PSBS) to outperform private banks in the December 2025 quarter (Q3FY26). These factors, combined with sustained improvement in asset quality and lower provisioning requirements, have strengthened PSBs' profitability and business momentum over the past several quarters.

An analysis of 10 quarters of data across 27 banks-including 11 state-run banks and 16 private lenders-shows that PSBs have consistently delivered stronger financial performance on the back of healthier credit-deposit dynamics and disciplined underwriting.