Industry Odisha Bureau, Aug 17: Financial analysts as well as experts in money matters have reportedly found out that the private banks in India delivered stronger profit growth, faster deposit expansion, and cleaner balance sheets than the public sector undertaking (PSU) banks, driven by better funding mix, margins, and asset quality in the first quarter (Q1) of the ongoing fiscal year 2026-27 (FY27).
Media reports, citing the findings of the financial analysts and experts in money matters on the ‘Profit Performance’, have stated that, “Private sector banks posted an aggregate net profit of Rs 55,019 crore, up 15.6% year-on-year (YoY), compared to PSU banks’ Rs 50,173 crore, up 13.5% supported by higher net interest margins (NIMs), cost control and a healthier loan portfolio.”
Citing certain instances, media reports have added that, “Axis Bank is projected to see the strongest earnings growth (+24.7% YoY in Q1 FY27), while HDFC Bank is expected to surpass SBI in quarterly profit for the first time.”
On the ‘Deposit Growth’, media reports, citing the findings of the financial analysts and experts in money matters, have further stated that, “While the private banks expanded deposits by 14% YoY, i.e. well above the 10.1% growth of the PSU banks, this superior deposit franchise, aided by the Reserve Bank of India (RBI)’s Foreign Currency Non-Resident (Bank) FCNR (B) deposit and External Commercial Borrowing (ECB) swap measures, has lowered funding costs and strengthened liquidity.”
On the ‘Asset Quality’, media reports, citing the findings of the financial analysts and experts in money matters, have added that, “While PSU banks cleaned up their books faster – gross Non-Performing Assets (NPAs) fell 13.1% YoY to Rs 2.41 trillion – private banks also reduced bad loans, albeit at a slower pace of 8.9%, with total NPAs at Rs 1.29 trillion.”
Analysts have reportedly commented that, “The key difference is that the private banks maintain lower overall NPA levels and better credit quality supported by disciplined lending and stronger risk management.”
On the ‘Market and Stock Performance’, media reports have also stated that, “The Nifty Private Bank Index rose 17% outpacing the Nifty PSU Bank Index in FY27. Leading private banks like IDFC First, Induslnd, RBL, Bandhan and YES posted gains up to 50%.”
It has further been reported that the financial analysts as well as experts in money matters “expect that the private banks would continue leading in near-term profitability and deposit growth, while the PSU banks may see a stronger comeback in the second half of FY27 with recovery margins hinging on cost-of-funds management and loan portfolio mix.”
