Listed Banks Record ₹94,228 Crore Profit in Q4FY25; Public Sector Banks Drive Growth

In the January to March quarter of FY25 (Q4FY25), listed Indian banks reported a significant net profit of ₹94,228 crore. This marks a 4.4% growth compared to the same quarter last year and a 3.7% increase over the previous quarter. The overall earnings momentum was largely driven by public sector banks, while private sector peers showed mixed results. The report, based on Capitaline data, reflects the broader impact of interest rate policies and asset quality trends on banking profitability.

Public Sector Banks Led the Q4 Earnings Surge

Public sector banks played a major role in the overall earnings growth, reporting a cumulative profit of ₹48,370 crore in the March quarter. This represents a robust 12.9% rise over the same quarter last year. A total of 12 public sector banks contributed to this figure, reflecting a stable earnings profile despite slower growth in interest income.

Read More: Public Sector Banks Record 33% Rise in Dividend Payouts!

Private Sector Banks Face Headwinds

20 private sector banks posted a combined net profit of ₹45,858 crore in Q4FY25, registering a decline of 3.3% year-on-year. The drop was partly due to exceptional losses reported by certain lenders. IndusInd Bank, the 5th largest private bank by market share, reported a net loss of ₹2,329 crore. This was attributed to accounting lapses related to derivatives and microfinance.

Net Interest Income Growth Remains Subdued

Net interest income, a key indicator of banking performance, showed muted growth across the sector. Private banks registered a 4.5% rise, while public sector banks reported a lower 2.7% growth. The reduction in the policy repo rate by 25 basis points in February weighed on income from interest, reflecting in the overall moderation of earnings.

Loan Growth Slows Across the Sector

One of the major reasons for the subdued performance in Q4 was the deceleration in loan growth. According to data from the Reserve Bank of India, total credit growth in FY25 stood at 11%, sharply lower than the 20.2% recorded in FY24. The impact of elevated interest rates for most of the financial year was evident, as banks saw slower offtake in advances, especially in unsecured loan segments.

Conclusion 

Banks also faced challenges from asset quality issues, particularly in unsecured lending. This has led to increased provisioning and cautious lending, further affecting the bottom line. As the financial system adapts to changing macroeconomic conditions, maintaining credit discipline and managing risks continue to be central themes.

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