Indian Banks Report ₹1.16 Trillion Q2 Profit as Earnings Rise 20% and Asset Quality Improves

The July-September quarter brought strong earnings for India's listed banks. Combined net profit across 32 lenders rose 20.1% from a year earlier to ₹1.16 trillion. 

Higher interest income helped, while lower provisions and continued improvement in asset quality added further support to earnings. 

Interest Income Remains a Key Driver 

The combined net interest income of the 32 banks rose 15.5% year-on-year to ₹2.44 trillion. 

Operating profit increased 15.4% to ₹1.81 trillion. At the same time, provisions and contingencies fell 9.1% to ₹27,271 crore. 

Bad Loan Ratios Continue to Fall 

The gross NPA ratio declined to 1.50% at the end of September, compared with 2.07% a year earlier and 1.70% at the end of June. 

Net NPAs also fell to 0.33%, from 0.46% a year ago and 0.39% in the previous quarter. 

Credit Growth Stays Ahead of Deposits 

Aggregate advances across the 32 banks grew 23.3% year-on-year, while deposits increased 19.1%. 

The gap shows that lending continued to expand faster than deposit mobilisation during the period. 

Public Sector Banks Lead Combined Profits 

State-owned banks reported combined net profit of ₹59,367 crore, up 20% from a year earlier. Private banks reported aggregate profit of ₹57,095 crore. 

Margin performance, however, differed among lenders. HDFC Bank and Axis Bank reported sequential declines in net interest margins, while SBI's domestic NIM improved by 11 basis points to 3.11%. 

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Conclusion 

The quarter saw India's listed banks report higher profits alongside stronger interest income and improving asset quality. Credit growth remained ahead of deposit growth, while margin trends varied across individual banks. 

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