Banks set for seventh straight year of profit growth in FY25: SBI, CBI, BoM, IOB, ICICI, HDFC, Axis, and Yes bank show strong momentum

Bank profitability across several regions witnessed mixed trends in FY24, largely influenced by elevated interest rates. However, with expectations of a more benign interest rate environment in FY25, bank profitability is likely to strengthen. In India, banks are on track to see their profits rise for the seventh year in a row. Early financial results from eight major banks—comprising both public sector banks (PSBs) and private banks (PVBs)—indicate an improvement in net profits as well as return on assets (RoA) in FY25.

Eight banks include State Bank of India (SBI), Central Bank of India (CBI), Bank of Maharashtra (BoM), Indian Overseas Bank (IOB), Industrial Credit and Investment Corporation of India (ICICI bank), Housing Development Finance Corporation (HDFC bank), Axis bank and Yes bank.

The banking sector showed robust performance in FY25, with both private and public sector banks delivering healthy growth in profitability and core banking operations, according to data compiled by SBI Research.

Among the top lenders, State Bank of India (SBI) stood out with a 16.1% year-on-year rise in net profit, reaching ₹70,901 crore in FY25, up from ₹61,077 crore in FY24. The state-owned giant also reported a 9.5% growth in deposits and a 12.6% growth in credit during the year, highlighting its steady expansion. Asset quality improved, with Gross NPA dropping from 2.24% to 1.82%, while RoA inched up to 1.1% in FY25. However, SBI’s Net Interest Margin (NIM), a key measure of profitability, declined slightly from 3.3% in Q4 FY24 to 3% in Q4 FY25, suggesting some pressure on lending spreads.

Another standout in the public sector was Central Bank of India (CBI), which saw a sharp 48.5% jump in net profit, reaching ₹3,785 crore in FY25 from ₹2,549 crore the previous year. Despite a modest 7.2% deposit growth, the bank reported a robust 15.2% growth in credit, reflecting aggressive loan book expansion. More significantly, its Gross NPA improved drastically from 4.5% in FY24 to 3.18% in FY25, one of the steepest declines among PSBs. RoA stood at 0.86% in FY25, while NIM stood at 3.17% in Q4 FY25.

Bank of Maharashtra (BoM) continued its stellar performance with a 37.1% rise in net profit, reaching ₹3,798 crore in FY25. The bank maintained 15.7% deposit growth and 17.4% credit growth. Asset quality saw further improvement, with Gross NPA falling to just 1.16%, one of the lowest in the sector.

In contrast, private sector leaders ICICI Bank and HDFC Bank maintained strong profitability while managing consistent deposit and credit expansion. ICICI Bank’s net profit rose by 15.5%, from ₹40,888 crore in FY24 to ₹47,226 crore in FY25. The bank also posted 14% growth in deposits and a 13.3% jump in credit, indicating a well-rounded performance. Its Gross NPA declined to 1.67%, and RoA improved to 2.41%, with NIM steady at 4.41%.

Meanwhile, HDFC Bank, which has been consolidating after its merger with HDFC Ltd, saw a 10.7% increase in net profit, rising to ₹67,347 crore in FY25 from ₹60,812 crore in FY24. While its deposit growth was modest at 14.1%, credit growth came in at 5.4%, reflecting solid loan book expansion. The bank maintained a steady NIM of 3.4% and 3.5% across both Q4 FY24 and Q4 FY25, respectively.

The SBI research findings highlight a clear trend: while public sector banks continue to lead in profitability and return ratios, private banks are closing the gap rapidly. Improved asset quality, stable margins, and disciplined credit growth across both segments suggest that the banking industry is well-positioned for continued profitability in FY25.