Are Indian banks out of the woods? Yes, no and the answers in between

Recovery of bad loans and fresh slippages or new NPAs will determine the road ahead for the banking industry

The earnings season is over. As I write this piece, most banks have announced their September-quarter results. Many have surprised observers, surpassing analysts’ profit estimates. Even if a few have announced losses or smaller profits, that’s primarily on account of one-off deferred tax asset (DTA) adjustments, following the government’s historic decision to pare corporation tax.
 
The quarter-on-quarter (Q-o-Q) net profit of 35 listed banks that had announced their earnings until last weekend was down by over 37 per cent, but their profits before tax were up 9.36 per cent. Why am I talking about Q-o-Q figures and not year-on-year