Banking profits likely to drop 11% in Q2
Indian banks are heading into a pretty quiet earnings season for July-September 2025, with loan and deposit growth expected at just 9-10%.
Rising bond yields have cut into treasury gains, and recent repo rate cuts are squeezing net interest margins (NIMs).
SBI is aiming for 11% loan growth but expects its NIM to dip to 2.4%.
Factors affecting banks' performance
SBI's profits are forecasted to slow down to ₹15,230 crore this quarter, while HDFC Bank expects ₹16,400 crore with a small drop in NIM to 3.1%.
Analysts at IIFL Capital see an overall 11% drop in banking profits year-on-year, blaming squeezed margins, lower trading gains, and higher operating expenses, partly offset by lower credit costs.
Plus, weaker treasury gains and challenges in SME loans are making it tougher for banks to boost their bottom line.