Rise in govt bond yields to affect public sector banks' Q4 performance

Analysts expect provision for investment depreciation to affect earnings

Rajnish Kumar, chairman of India’s largest lender State Bank of India (SBI), in an interview with a news channel, said the rise in government bond yields might affect the bank’s March quarter (Q4) results and the mark-to-market provisions would hit most banks. So, there is little doubt that other public sector banks (PSBs) will not go unscathed.
 
As witnessed in the December quarter, the increase in 10-year government bond (G-secs) yield will continue to worsen the provisioning pain for most PSBs in Q4, thereby weighing on their earnings.
 
Though notional in nature — as these are book losses