Private sector banks' credit costs up in Q3FY25 on higher provisions

Slippages to NPAs in credit card, microfinance segments increase

Private sector banks that announced their earnings for the October-December quarter (Q3) of 2024-25 (FY25) reported a rise in credit costs due to higher provisions, mainly for unsecured retail loans.

 

Axis Bank, Kotak Mahindra Bank, and RBL Bank, which announced their Q3 earnings, also reported a rise in slippages to non-performing assets (NPAs) in their credit card and microfinance segments. They are hopeful of seeing normalisation in these portfolios by the second quarter (Q2) of 2025-26 (FY26).

 

Axis Bank’s credit cost rose to a multi-quarter high amid a rise in slippages due to seasonality and elevated provisions.

 

“In Q3, gross