Private banks' net profit soars on healthy loan growth, higher margins

NIMs expanded as banks hiked rates on lending faster than those on deposits

The net profit figures of private sector banks soared in the July-September (Q2FY23) quarter, on the back of higher net interest income (NII) and robust loan growth.

Moreover, the lag in passing off increased rates of interest to depositors while pushing the lending rates higher, following the raising of the repo rate by the Reserve Bank of India (RBI) by 190 basis points, translated into an impressive growth in the margins of these lenders.

Except for Yes Bank, all major private sector lenders that reported their July-September earnings, saw their provisions drop. Asset quality also improved significantly as both gross