Margin squeeze takes a toll on banks' profit in Q2FY26, shows data

Hardening yields limit contribution from Treasury gains

With interest margins under pressure, banks posted 4.2 per cent year-on-year (Y-o-Y) growth in net profit at ₹96,506 crore for the second quarter of 2025-26 (Q2FY26). Sequentially, profit rose 5.21 per cent over ₹91,727 crore in Q1FY26, according to the data compiled by BS Research Bureau for listed 30 commercial banks.  

These include HDFC Bank, Axis Bank, ICICI Bank, State Bank of India, Bank of Baroda and Punjab National Bank. The hardening of yields put a limit on support from treasury income, a part of non-interest income, to the bottomline, bankers said. 

Interest rate