Pvt banks to report healthy earnings in Q3, aided by robust credit growth

Credit growth in the banking system is touching decadal highs but deposit growth has lagged

Private sector banks are expected to report healthy growth in earnings during the October–December quarter of FY23.

This would be aided by robust credit growth, margin expansion, benign credit costs, and lower provisioning burden. However, operational costs may remain high due to investment in businesses. Also, other income of banks in Q3 of FY23 would not see a significant hit as treasury performance is likely to remain stable.

There is also a possibility of a write-back as yields on government securities and corporate spreads have moderated on a sequential basis.

According to Bloomberg estimates, private banks may see their net