Large private banks hold firm while mid-sized banks struggle on NIMs and slippages: Report
New Delhi [India]July 21 (Memorial): According to a report of Equirus Securities, large private banks showed flexibility in the first quarter of 26 financial years, and medium -sized banks felt pressure on margins and increasing shifts.
The report emphasized mixed tendencies in net interest margins (NIMS). Large private banks, with a higher share of repo-bagonal loans, performed better than expected.
This is supported by interest earned in investments and repayments and relatively stable funding cost.
On the other hand, medium -sized banks such as AU Küçük Finans Bank (AUBBK) and RBL Bank (RBK) reported weak NIMs due to higher interest returns and limited benefits from lower financing costs.
However, according to the report, these banks made a reservation for important treasury earnings.
The quality of asset quality trends are extensively stable throughout the banking sector, but some segments have faced stress. AU Bank, especially in Southern India, reported higher shifts in an affordable housing loan portfolio. RBL Bank faced the pressure of asset quality in the İş Banking segment.
While the stress was slightly inspected in already affected sectors such as Microfinans (MFI) and credit cards, general concerns continued.
The report also predicted that AU Bank’s profit forecasts for 26 and MY27 decreased by 1.1 percent and 1.0 percent, respectively and reflected higher stress in MFI and mortgages, respectively. HDFC Bank’s FY26 profit estimate decreased by 2.3 percent, but the 27 financial year projection was increased by 2.1 percent due to improvement of business leverage.
Icici Bank saw a small decrease of 0.4 percent for the 26 fiscal year gain, but a 5 percent revision for the 27 fiscal year, predicting the normalization of margin. RBL Bank faced the most upright decline and 26 and FY27 profit forecasts decreased by 6.1 percent and 6.7 percent, respectively due to ongoing shifts.
Union Bank also saw that earnings decreased by 6.1 percent in 26 fiscal financial year and 2.9 percent for 27 fiscal years, caused by slow business growth and out -of -activity income.
In general, the Q1FY26 earning season offered a mixed picture. Large banks such as HDFC and Icicıcı kept solid supported by better margin management and powerful provision bumpers.
On the other hand, medium -sized banks such as AU Bank and RBL Bank were under pressure affected by weak margins and the quality of asset quality, even if treasury gains offer some pillow. (MOMENT)
