India's banking sector in a tense huddle despite good ICICI Bank numbers
Net interest margins, a measure of how lenders make on every loan sold, shrank to 4.43% in the three months ended Dec. 31, from 4.53% in the previous quarter.
- Jan 21, 2024,
- Updated Jan 21, 2024 7:47 AM IST
ICICI Bank’s margins shrank, adding to signs of a slowdown in the banking sector that sent shares of HDFC tumbling in recent days.
India's second-biggest private bank reported a better-than-expected third-quarter profit on Saturday, helped by robust loan growth, although its net interest margin (NIM) shrank for the fourth straight quarter.
Net interest margins, a measure of how lenders make on every loan sold, shrank to 4.43% in the three months ended Dec. 31, from 4.53% in the previous quarter.
Indian lenders have been reporting double-digit loan growth consistently over the past few months owing to higher demand, but rising deposit costs have squeezed their margins.
Earlier this week, HDFC Bank, India's biggest private lender, reported weak margins for a second consecutive quarter.
While earnings at Indian banks may have swelled in recent quarters on surging demand for credit, the RBI has flagged potential buildup of risks in the economy.
With unsecured lending rising almost twice as fast as overall credit, the central bank asked lender to increase buffers for some consumer loans in November.
Shares of HDFC Bank Ltd., the nation’s largest private-sector lender, tumbled the most in more than three years on Wednesday after it posted earnings that signaled a slowdown, disappointing investors on deposits and stagnant margins.
ICICI Bank made a provision of 6.3 billion rupees toward its exposure to alternative investment funds, after the regulator issued restrictions on such investments late last year.
ICICI Bank’s margins shrank, adding to signs of a slowdown in the banking sector that sent shares of HDFC tumbling in recent days.
India's second-biggest private bank reported a better-than-expected third-quarter profit on Saturday, helped by robust loan growth, although its net interest margin (NIM) shrank for the fourth straight quarter.
Net interest margins, a measure of how lenders make on every loan sold, shrank to 4.43% in the three months ended Dec. 31, from 4.53% in the previous quarter.
Indian lenders have been reporting double-digit loan growth consistently over the past few months owing to higher demand, but rising deposit costs have squeezed their margins.
Earlier this week, HDFC Bank, India's biggest private lender, reported weak margins for a second consecutive quarter.
While earnings at Indian banks may have swelled in recent quarters on surging demand for credit, the RBI has flagged potential buildup of risks in the economy.
With unsecured lending rising almost twice as fast as overall credit, the central bank asked lender to increase buffers for some consumer loans in November.
Shares of HDFC Bank Ltd., the nation’s largest private-sector lender, tumbled the most in more than three years on Wednesday after it posted earnings that signaled a slowdown, disappointing investors on deposits and stagnant margins.
ICICI Bank made a provision of 6.3 billion rupees toward its exposure to alternative investment funds, after the regulator issued restrictions on such investments late last year.