Home / Business and Economy / Private Banks Lead Profit Surge, PSUs Improve Asset Quality
Private Banks Lead Profit Surge, PSUs Improve Asset Quality
17 Aug
Summary
- Private banks' profits grew 15.6% year-on-year in Q1 FY27.
- PSU banks saw gross NPAs decline by 13.1%, a sharper improvement.
- Private lenders expanded deposits faster, with 14.0% year-on-year growth.
As of August 17, 2026, India's banking sector saw private lenders outperforming their public sector counterparts in profitability during the June quarter of fiscal year 2027. Private banks reported aggregate net profits of ₹55,019 crore, marking a 15.6% year-on-year increase. They also led in deposit growth, which rose by 14.0% to ₹96.59 trillion.
Public sector undertaking (PSU) banks, however, exhibited stronger gains in asset quality and net interest income. Their aggregate gross non-performing assets (NPAs) decreased by 13.1% year-on-year, a more substantial improvement than the 8.9% decline seen in private banks. Despite this, private banks maintain a cleaner overall asset profile, though the difference is diminishing.
State-owned banks have been steadily gaining incremental market share in credit for the second consecutive year. While deposit growth was slower for PSUs at 10.1%, their credit growth was slightly higher at 17.4%. Looking ahead, projections suggest private banks may regain their lead in growth, driven by optimized balance sheets and favorable credit-to-deposit ratios.
