Indian banks to benefit from likely uptick in loan growth as profits rise: S&P Global Market Intelligence

New Delhi [India], May 15 : The Indian banks will benefit from likely uptick in loan growth as profits have witnessed a rise, according to a report by S&P Global Market Intelligence.

All six of the largest public and private sector banks in India logged growth in their fiscal full-year net income, helped by steady margins and lower provisions, according to latest data analysis by S&P Global Market Intelligence.

Highlighting the key points from the analysis, the report added that net income at State Bank of India, the country's largest lender, rose 16.1 per cent to 709.01 billion rupees, with a net interest margin of 2.81 per cent. HDFC Bank Ltd., the country's largest private sector bank, logged a 10.7 per cent increase in net income, with its net interest margin clocking in at 3.45 per cent.

The data mentioned in the report highlights that the loan books of the six banks expanded by an average of 11.29 per cent in the fiscal year, weaker than the 21.18 per cent growth in the previous fiscal year.

Average loan growth at the banks is projected to slightly exceed 12 per cent in the fiscal year ending March 2026, and 13 per cent in the fiscal year ending March 2027, according to Visible Alpha's mean estimates based on at least three analyst contributions, the global market intelligence firm added.

Net profits at public sector banks are expected to dip slightly in the fiscal year ending March 31, 2026. State Bank of India, for instance, is expected to record a 3.1 per cent decline in net income to 687.20 billion rupees, according to Visible Alpha's estimates, the report added.

On the other hand, HDFC Bank's net income is expected to grow 9.5 per cent in the fiscal year to 737.20 billion rupees, said the report.

As per the government data, public Sector Banks (PSBs) in India have achieved a remarkable milestone by recording their highest-ever aggregate net profit of Rs 1.41 lakh crore in the financial year 2023-24.

This landmark achievement reflects the sector's robust turnaround, underpinned by a significant improvement in asset quality. The Gross Non-Performing Assets (GNPA) ratio steeply declined, dropping to 3.12 per cent in September 2024. Demonstrating continued momentum, they registered a net profit of Rs 85,5206,000 crore in the first half of 2024-25.

In addition to their stellar performance, PSBs have contributed significantly to shareholder returns, paying a total dividend of Rs 61,964 crore over the past three years. This remarkable financial growth underscores the sector's operational efficiency, improved asset quality, and stronger capital base.

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