Listed banks post ₹94,228 crore profit in Q4; PSBs lead with 13% rise

Driven by strong public sector bank performance, listed banks saw a 4.4% YoY profit rise in Q4 FY25, despite private banks posting lower profits and muted NIMs

The listed domestic banks have reported a net profit of ₹94,228 crore for the January-March quarter of the financial year 2024-25 (Q4FY25), a growth of 4.4 per cent year-on-year (Y-o-Y), while sequentially it grew by 3.7 per cent, according to data by Capitaline.

 

The rise in profit is driven by public sector banks, with 12 lenders reporting cumulative profit of ₹48,370 crore in Q4, up 12.9 per cent Y-o-Y. Twenty private sector banks reported a total net profit of ₹45,858 crore, down 3.3 per cent from the same period of the previous year.

 

Notably, Indusind Bank, the fifth largest private sector bank, reported a net loss of ₹2,329 crore in Q4 on the back of derivative and micro finance accounting lapses.

 

Banks’ net interest income growth was in single digit, 4.5 per cent for private sector and 2.7 per cent for PSBs, due to various reasons, with policy repo rate cut of 25 bps in February also weighing on core income growth.

 

“Net interest income grew at a slower pace of 7 per cent as the net interest margin contracted to 3.0 percent in the financial year 2025 from 3.2 per cent the previous year as deposit re-pricing took full effect,” said Subhasri Narayanan, director, Crisil Ratings.

 

“While NIMs moderated in the financial year 2025, credit costs were also lower by 10 bps, providing some offset from a profitability perspective. This, along with a similar level of operating expenditure savings, kept the return on assets stable,” she said.

 

Slower loan growth and asset quality pressure on unsecured loans were also cited as reasons for muted growth in net profit.

 

“Profits were weak for banks this time as loan growth is slowing and therefore, interest income is growing at a slower pace. Secondly, cost of deposits remain elevated and net interest margins remain under pressure and slight uptick in credit provisions. And when we look at the private sector banks, because of pressure in the unsecured segment, credit cost was also up,” said Anil Gupta, senior vice-president and Co group head, financial sector ratings at Icra. 

 

Reserve Bank of India data shows banks’ loan growth fell sharply to 11 per cent in FY25 as compared to 20.2 per cent in the previous financial year. Elevated interest rates for most part of the financial year is one of the reasons for slower growth in advances.

 

Going ahead in the financial year 2025-26, RoA is set to moderate 10-20 basis points to 1.1-1.2 per cent. This will be driven by a similar contraction in their NIMs, as interest rates on loan assets are likely to reduce faster than those on deposit liabilities in a falling interest rate environment, Narayanan added.