Banks – Jan-Mar’26 Earnings Preview – Loan growth led by seasonality & stretched WC
Published on 10 Apr 2026
Banks under our coverage are likely to see a steady quarter; core earnings (ex-IIB) may increase by 1.5% QoQ to INR 671bn (+10.2% QoQ in Q3FY26) as core PPoP might inch up by 2.2% QoQ. Loan momentum is expected to sustain; we see 5.0% QoQ growth (4.6% in Q3’26). Deposit accretion is likely to pick-up to 5.6% QoQ (2.2% in Q3’26) as Q4 is seasonally strong and corporates preferred to maintain higher cash in form of CA due to liquidity crunch caused by the war. Hence, calculated NIM might fall by 2bps QoQ to 3.15% due to the part impact of the 25bps repo rate cut in Dec’25. Fees may rise by 7.0% QoQ to INR 477bn, which would be offset by 5.4% QoQ rise in opex to INR 1.08trn. Core PPoP may be INR 1.07trn (+2.2% QoQ). Private banks could see a better quarter as due to seasonality, opex for PSBs would rise. Asset quality in terms of gross slippages and provisions is likely to be steady QoQ. Banks’ PAT is expected to decrease by 2% QoQ to INR 761bn. Among covered banks, we prefer KMB, ICICIB and SBI.
