Banks' net income likely to decline 4% on margin pressure due to rate cuts

BANKS are in for a bad quarter in March both in terms of net income and high pricing for liabilities, say analysts.

- BENN KOCHUVEEDAN

A preview of earnings of 19 listed banks is likely to show their net profit has declined by 4% yea-on-year in March quarter, mainly due to pressure on net interest margins (NIM) as a result of rate cut by the Reserve Bank, as per analysts. The profit decline is led by private sector lenders and not public sector lenders, the traditional laggards. Additionally, analysts expect a contraction in the NIM to the tune of 5-8 bps for the March quarter.