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Private bank shares fall after Q1 margins disappoint

The Nifty Private Bank index is down about 4% for the week, led by double-digit drops in HDFC Bank and steep margin pressure from thinning net interest margins.

Reported · Written up by our desk · Asia

Shares of India’s large private banks sold off sharply after weak Q1 results highlighted margin pressure, with the Nifty Private Bank index down about 4% for the week to around 1 pm on 22 July, according to LiveMint Markets.

HDFC Bank shares were down more than 8% and Axis Bank dropped about 7% over the same period, while Kotak Mahindra Bank fell around 2.5% and ICICI Bank was roughly flat, the outlet said.

The selloff was tied to thinning net interest margins, with several banks reporting NIM declines on a quarter over quarter basis due to loan-mix shifts toward lower-yielding corporate lending and tepid retail credit growth, alongside spread compression.

LiveMint Markets cited bank-specific figures including HDFC Bank’s NIM at 3.26% for the June quarter, down 12 basis points QoQ, and Axis Bank’s NIM at 3.46%, down 16 basis points QoQ, while ICICI Bank’s NIM rose to 4.36% from the prior quarter; analysts said the key question entering Q2 is whether NIM recovery holds through the second half of FY27 amid pressure from margin compression and monsoon uncertainty.

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