Indian Banks' NIM Recovery Likely Delayed by Couple Quarters -- Market Talk

Dow Jones03-24

0719 GMT - The recovery for Indian banks' net interest margins expected from 4Q FY 2026 may be delayed by a few quarters, Nomura analysts say. One reason is that banks' current account savings account ratios are moderating, versus Nomura's previous assumption of stability. This is because depositors are migrating savings into higher-yielding term deposits as rate differentials widen, and digital banking has shown increased effectiveness. Secondly, wholesale funding costs have been rising due to structural deposit tightness. Domestic banks with higher residual liquidity buffers and stronger liability franchises appear best placed in this environment. Kotak Mahindra Bank stands out most clearly, says Nomura, which upgrades the stock's rating to buy from neutral while lowering the target price to 445.00 rupees from 460.00 rupees. Shares are 3.3% higher at 368.20 rupees. (ronnie.harui@wsj.com)

(END) Dow Jones Newswires

March 24, 2026 03:19 ET (07:19 GMT)

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Secondly, wholesale funding costs have been rising due to structural deposit tightness. Domestic banks with higher residual liquidity buffers and stronger liability franchises appear best placed in this environment. Kotak Mahindra Bank stands out most clearly, says Nomura, which upgrades the stock's rating to buy from neutral while lowering the target price to 445.00 rupees from 460.00 rupees. Shares are 3.3% higher at 368.20 rupees. 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