Bank earnings: Loan growth to improve, SC gives clarity on asset quality

Lenders are expected to show quarter on quarter improvement in loan growth, say analysts.

India’s reviving economy could help banks to improve loan demand sequentially even if margins may come under pressure during the January-March quarter of the previous financial year, analysts said.

However, mark-to-market losses could dent profitability for the banks due to hardening bond yields.

Bond yields started heading north after the government announced a borrowing programme of Rs 12 trillion during the Union budget for 2021-22. Between February and March, bond yields hardened by around 25 bps which could result in marked-to-market losses on banks in the bond portfolio.

“We were insulated till 6.1% levels but the yields ended at a