Mumbai: The banking sector reported a mixed bag of results for Q4FY25. While some large private banks such as HDFC Bank, ICICI Bank reported margin improvement, there were others who reported muted profits, weighed down by higher provisions in the microfinance portfolio.Anand Dama, head Banking and Financial Services (Research) at Emkay Global said, “Most banks exhibited softer growth. Few private banks such as ICICI, HDFC Bank, Kotak Bank, Axis Bank, surprised positively on the margins while few public sector banks such as Bank of Baroda, Bank of India disappointed. Most banks have avoided providing a clear guidance on growth, while we expect margins to correct in the first half given the recent policy rate cuts and with more cuts to come.”“On the asset quality front, most banks believe that unsecured loan stress have peaked out but personal loans and micro-finance should still see elevated stress in the first half,” added Dama.HDFC Bank, country’s largest private sector lender, reported a 6.7 per cent year–on–year (Y-o-Y) jump in standalone net profit at Rs 17,616 crore in the January–March quarter of the financial year 2024-25 (Q4FY25), aided by healthy growth in net interest income (NII) and lower provisions. Another top lender ICICI Bank too demonstrated robust earnings resilience with Q4FY25 profit at Rs 12600 crore outperforming on lower credit cost. Its Net Interest Margin (NIM) a key indicator of profitability was up 16 basis points quarter on quarter (QoQ) due to curtailed slippages and stability across key metrics. However, Kotak Mahindra Bank’s performance fell short on coreprofitability and had softer undertones. It reported 14 per cent year-on-year fall in net profit for the quarter ended March at Rs 3,552 crore, largely due to higher provisions made for micro loans. So was the case with IDFC First Bank that too, saw its Q4 net profit falling due to micro loan stress and subsequent provisions. Another lender RBL Bank reported an 80 per cent year-on-year (y-o-y) fall in net profit for the quarter ended March at Rs 69 crore, as provisions spiked due to higher bad loans.The country’s largest lender State Bank of reported a 10 per cent year-on-year (y-o-y) decline in standalone fourth quarter (Q4FY25) net profit at Rs 18,643 crore, with the bottom line being weighed down by a jump in total provisions. Bank of Baroda’s net profit at Rs 5050 crore was marginally ahead of estimates on higher other income even as net interest income was a miss and credit costs were higher.Most banks reported robust non-core or treasury income that helped the lenders report improved earnings.Meanwhile the public sector banks’ cumulative profit rose to a record level of Rs 1.78 lakh crore in the fiscal year ended March 2025, registering a growth of 26 per cent over the previous year.All 12 public sector banks had earned a total profit of Rs 1.41 lakh crore in FY24. The year-on-year increase in profit in absolute terms rose by about Rs 37,100 crore in FY25.
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