Indian Banks Report 20% Profit Growth in Q2 FY27, Reaching ₹1.16 Lakh Crore
Indian banks profits surged 20% in Q2 FY27, driven by strong net interest income and credit growth, according to a recent report.
New Delhi, November 12 (Daily Kiran) : Indian banks have reported a significant profit increase in the second quarter of the financial year 2027, reaching ₹1.16 lakh crore. This marks a 20% rise compared to the same period last year, primarily driven by robust net interest income and credit growth. The findings were released in a report on November 12.
According to Care Ratings, the profit surge is mainly attributed to a rise in net interest income (NII), supported by a nearly 19% increase in bank credit. The previous year’s weak performance also contributed to this growth, as profits had only risen by 4.2% during the same quarter last year.
The report noted that an increase in bond yields during the quarter led to a significant drop in treasury income. The 20% profit growth was partly due to a low base effect, as profits in Q2 FY26 had seen only a modest increase.
Looking ahead, the report suggests that profit growth may slow in the second half of FY27. This is due to expected reductions in one-time gains, continued weakness in treasury income, and potential increases in provisions before the implementation of Expected Credit Loss (ECL) regulations.
In Q2 FY27, the Return on Assets (ROA) improved by 7 basis points year-on-year to 1.39%, the highest level since Q2 FY25. This improvement was largely driven by one-time gains. Excluding these gains, the ROA remains roughly in line with the previous year’s level.
Vineet Jain, Senior Director at Care Ratings, commented that the banks’ earnings this quarter were primarily generated from core lending. Operating profits increased by 13-15% year-on-year across both types of banks, indicating that the difference in profit growth is largely due to provisions. He added that lower credit costs have allowed private banks to advance more rapidly.
