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Mid-Caps Defy Monsoon, Surge on Loans
7 Oct
Summary
- Mid-cap banks achieved over 20% loan growth in Q2 FY27.
- Dhanlaxmi Bank saw gold and MSME loans grow significantly.
- Karnataka and J&K Banks posted strong retail and corporate loan increases.
Mid-cap private banks have reported robust loan growth exceeding 20% year-on-year for the September 2026 quarter, outperforming expectations during a traditionally slow period.
These banks, often focusing on gold, SME, and retail lending, have successfully navigated a deficient monsoon season. Kerala-based Dhanlaxmi Bank saw its gross advances rise by 22.29%, with gold loans growing by 53.4% and MSME loans by 35.9%.
Karnataka Bank and Jammu and Kashmir Bank also posted significant gains. Karnataka Bank's gross advances increased by 24.9%, driven by retail and corporate lending. J&K Bank reported a 23.72% rise in gross advances, powered by corporate and agriculture loans.
Despite their smaller scale compared to giants like HDFC Bank and Kotak Mahindra Bank, mid-cap banks trade at significantly lower valuations on a price-to-book basis, presenting a potential anomaly.
