Neutral impactSector
Indian banks can absorb Q2 treasury losses as 17-18% credit growth cushions hit: Digant Haria
CNBC-TV18 1 hr ago·5 Oct 2026, 5:09 am
Indian bank stocks have faced recent volatility due to unrealised losses in their investment portfolios. However, industry experts suggest these losses are manageable. The primary reason is the robust credit growth of 17-18% seen in the second quarter. This strong loan demand provides significant operating leverage, allowing banks to offset their treasury losses through fee income and better business performance.
For investors, this news implies that the worst of the recent market turbulence for banks may be over. The sector's underlying health remains strong, supported by a healthy loan book and improving operating metrics. This resilience helps protect the banks' overall profitability despite temporary fluctuations in their bond holdings.
Looking ahead, investors should monitor two key developments. First, the upcoming Monetary Policy Committee (MPC) meeting will signal the central bank's stance on interest rates. Second, continued foreign portfolio investor selling could create short-term pressure on bank stocks. Keeping an eye on these factors will help gauge the sector's future trajectory.
Excerpt from CNBC-TV18
Digant Haria, Founder of GreenEdge Wealth Services, expects lender margins to stabilise as strong business growth provides operating leverage, while RBI’s October policy and foreign selling remain key factors for bank stocks. The views and tips expressed by investment experts on CNBCTV18.com are their own, not of the…Read the original at CNBC-TV18
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- Category: Sector.
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