Net interest income of banks grew by a record 25.5 percent in the third quarter
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This reflects a situation of better credit offtake and higher yields on loans. This fact has come out from an analysis. Banks have earned higher earnings on loans during the quarter.
Net interest income (NII) of banks grew by a record 25.5 per cent to Rs 1.78 lakh crore in the quarter ended December 2022. This reflects a situation of better credit offtake and higher yields on loans. This fact has come out from an analysis. Banks have earned higher earnings on loans during the quarter. Net interest margin (NIM) of banks increased by 0.17 percentage points to 3.28 per cent during the quarter.
Sanjay Agarwal, senior director, Care Ratings, said this is because banks re-rated existing loans at a higher rate and increased interest rates on new loans. On the other hand, he did not change the deposit rates. However, the increase in net interest margin was led by private sector banks. Their NIM rose by 0.15 per cent to 4.03 per cent on an annual basis. On the other hand, the NIM of public sector banks increased by 0.17 percent to 2.85 percent. Net interest income or NII is the main source of revenue for banks.
It is the difference between the interest earned by the banks and the interest paid on the deposits. Aggarwal believes that the re-pricing of liabilities will stabilize the net interest margin going forward. He said that loan demand remained in high double digits, so now some leading banks have started giving higher returns to depositors. The Reserve Bank of India has increased the key policy rate repo by 2.50 per cent since May last year. Inflation remains above the Reserve Bank’s comfortable level of four per cent (two per cent up or down).
Disclaimer:Prabhasakshi has not edited this news. This news has been published from PTI-language feed.
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