Banks see uptick in credit growth; asset quality likely to improve

"An increase in bond yields would impact treasury performance," Motilal Oswal Securities said.

After remaining sluggish since the start of the coronavirus (Covid-19) pandemic in March 2020, commercial banks saw some uptick in credit growth during the October – December period of 2021, which could help them report better profitability, analysts said.

Q3FY22 saw loan growth improving due to festive season demand along with pent up demand as there were minimum economic disruptions due to lockdowns. According to Reserve Bank of India’s (RBI) data, year-on-year loan growth of banks inched up to 7.3 per cent by the end of September, from about 6.1 per cent in June end.

"Q3FY22 is expected to be