Hardening bond yields to weigh on bank profits in September quarter
Economic Times 2 hrs ago·14 Oct 2026, 1:19 am
Banking stocks are facing headwinds as bond yields continue to rise. Higher yields increase the cost of borrowing for banks, which can squeeze their profit margins. This dynamic is expected to weigh on the net profits of major lenders in the September quarter.
Despite this pressure, analysts remain optimistic. Banks are seeing strong deposit inflows from the Reserve Bank of India's foreign currency non-resident (FCNR-B) deposit swap scheme. This liquidity boost is helping banks fund their lending, supporting a steady rise in net interest income.
Investors should watch for the upcoming quarterly results. While profit growth is likely to be healthy, the key will be how banks manage the higher cost of funds. A strong deposit base and disciplined lending could help mitigate the impact of rising yields.
Excerpt from Economic Times
For the September quarter, Nifty 50 banks are forecasted to see an 11.5% rise in net interest income, yet net profits are expected to grow more slowly at around 10%. This growth is supported by robust capital inflows from the RBI's FCNR-B deposit swap scheme, bolstering deposit growth. Leading banks like Axis Bank and…Read the original at Economic Times
Affected stocks
Bearish2 stocks
Bull / bear label is derived from the article's AI sentiment — indicative, not advice. Prices may be delayed.
Key takeaways
- Concerns Kotak Mahindra Bank (KOTAKBANK).
- Category: Results.
- AI reads the tone as negative (potentially bearish) for the stock.
- Flagged as a high-impact, market-moving story.
- Also mentions AXISBANK.
Why it matters
This is a high-impact development for Kotak Mahindra Bank and could move the stock. The tone is negative — watch for downside reaction. Use the price and stock snapshot to gauge how the market is responding.
