Indian Banks’ Earnings Rise 20% As NII Grows 15%, Provisions Decline

The report said banks under its coverage recorded a 20 per cent year-on-year increase in earnings in the second quarter of FY27. (Image Source: Pixabay)

Indian banks could be heading towards another phase of earnings improvement, with favourable changes in lending patterns, evolving interest rates and stable asset quality expected to support profitability. According to a report by Kotak Institutional Equities, lenders are likely to see further growth in interest income, while relatively low credit costs and controlled bad loans should provide additional support in the coming quarters.

The report highlighted that banks covered by the brokerage delivered a 20 per cent year-on-year increase in earnings in the second quarter of FY27. Improved operating performance and a major reduction in provisions were among the key factors behind the growth.

Indian banks recorded healthy financial performance during the July-September quarter, with improvements across several key profitability indicators. Net interest income (NII), which represents the difference between the interest earned on advances and the interest paid on deposits, increased by approximately 15 per cent year-on-year.

Operating profit also expanded by around 15 per cent during the quarter, reflecting continued strength in core banking operations. Meanwhile, provisions fell 25 per cent compared with…

Original source: https://www.timesnownews.com/business-economy