Banks’ profits set to moderate in FY26, says India Ratings

India Ratings expects Indian banks’ profitability to decrease in FY26 due to rising delinquencies and increased credit costs. The loan-to-deposit ratio has risen to 80.4%, which may constrain loan growth in the medium term. Credit growth forecast has been revised to 13.5% for 2024-25, with competition and regulatory changes posing challenges.