State-owned banks likely to see lower gains in bond book in FY22: Icra

Limited headroom for yields to decline further, says rating agency

Public sector Banks, which reaped windfall treasury gains in FY21, are likely to see much lower gains in their bond portfolios in FY22 due to limited headroom for yields to decline further, according to Icra.

The rating agency said public sector banks in India reported net profits in FY21 after five straight years of losses, supported by windfall treasury gains. PSBs booked profits of Rs 31,600 crore from this source compared to overall profit Before Tax (PBT) of Rs 45,900 crore in FY21.

They recorded higher gains on the back of higher Statutory Liquidity Ratio (SLR) holdings than private banks.