Banking stocks saw sharp stock‑specific moves on Monday as investors reacted to a flood of fourth‑quarter business updates, triggering volatility across private and PSU lenders. Shares of several frontline private banks slipped amid concerns around funding costs, deposit mix and near‑term earnings visibility. The Nifty Bank index traded lower, slipping around 0.83 per cent to hit an intraday low of 24,458.45
Shares of HDFC Bank fell 0.6 per cent to hit an intraday low of Rs 745 despite the lender reporting steady balance‑sheet growth. Bandhan Bank slipped 1.3 per cent to Rs 144, while AU Small Finance Bank declined 1.4 per cent to an intraday low of Rs 856. IndusInd Bank and IDBI Bank were among the worst performers, both falling nearly 2.8 per cent during the session.
HDFC Bank’s business update showed deposit growth continuing to outpace loan growth, with deposits rising 14 per cent year‑on‑year compared with a 12 per cent increase in advances for the period ended March 31, 2026. Deposits jumped 9 per cent sequentially, sharply ahead of the 4 per cent growth in loans, underscoring improving liquidity. However, the faster rise in time deposits—up 16 per cent year‑on‑year—compared with slower CASA growth signalled rising funding costs, raising concerns over margin pressure. The stock remains under pressure, having declined nearly 25 per cent year‑to‑date amid leadership changes and cautious investor sentiment.
In contrast, Bandhan Bank’s update pointed to improving asset quality trends. Collection efficiency strengthened to 98.9 per cent in March from 98.1 per cent in December, with both microfinance and non‑micro segments showing improvement. Loans and advances rose 12.6 per cent year‑on‑year to about Rs 1.54 lakh crore, while deposits grew 10 per cent to Rs 1.66 lakh crore. Despite the positive indicators, the stock saw profit‑taking as investors remained wary of the lender’s past stress in its microfinance portfolio.
AU Small Finance Bank reported strong deposit growth of 22.8 per cent year‑on‑year, outpacing loan growth of 21.3 per cent, bucking the broader industry trend where credit expansion has exceeded deposit mobilisation. However, a decline in the CASA ratio to 28.4 per cent from 29.2 per cent a year ago highlighted a shift toward higher‑cost term deposits, tempering near‑term optimism around net interest margins.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
