Shares of private sector banks saw sharp selling pressure on Monday after the Street reacted negatively to their December quarter (Q3) earnings, dragging the broader banking pack lower amid weak market sentiment.

The sell-off in private bank stocks was in line with the broader market, with benchmark indices Sensex and Nifty slipping as much as 0.7% in the first hour of trade after U.S. President Donald Trump threatened to impose taxes on European countries opposing his plans to acquire Greenland.

RBL Bank was the worst performer among private lenders, plunging as much as 6.5% to a low of ₹297.15 on the NSE. The lender saw heavy selling amid concerns over elevated credit costs and stress in unsecured lending segments—credit cards and microfinance—despite reporting strong year-over-year net profit growth in its Q3 FY26 results. The bank’s standalone net profit surged 5.5 times to ₹214 crore for the quarter ended December 31, 2025 (Q3 FY26), compared with ₹33 crore in the year-ago period.

HDFC Bank, the sector heavyweight, also traded lower, declining about 0.7% intraday to hit a low of ₹923.85. The stock came under pressure amid concerns over slower deposit growth relative to loan expansion, which has led to a high loan-to-deposit ratio (LDR). While the bank maintained healthy credit growth of around 11.9% YoY, deposit growth lagged at 11.6% YoY.

In a similar trend, ICICI Bank shares slipped nearly 3% to touch a low of ₹1,364.30 on the NSE, while YES Bank shares dropped over 3% to hit a low of ₹22.73 following their Q3 results.

The sharp selling in ICICI Bank shares was mainly due to net profit falling short of analyst estimates. The decline was also driven by a significant one-off provision mandated by the RBI for a category of agricultural loans. The lender reported a 4.02% year-on-year decline in standalone net profit for the December quarter, which fell to ₹11,318 crore. Total provisions nearly doubled to ₹2,556 crore in Q3 FY26, largely due to a one-time standard asset provision of ₹1,283 crore for certain agricultural loans as mandated by the RBI.

Meanwhile, YES Bank on Saturday reported a strong performance for the third quarter ended December 2025 (Q3 FY26), with net profit rising 55.4% year-on-year to ₹952 crore, aided by a lower cost of funds, improvement in margins, and a sharp gain from security receipts. On a sequential basis, profit surged 45.4% from ₹654 crore in the September quarter.

Among others, shares of IndusInd Bank, Bandhan Bank, and IDFC First Bank were also trading lower, dragging the Nifty Private Bank index down by 0.65%.

On the other hand, shares of Kotak Mahindra Bank, Axis Bank, and Federal Bank were trading higher by around 1%.

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