Banks with a year on year profit after tax growth of 4% in the recently concluded quarter, are set to get weaker in the second quarter on lower net interest margins among other reasons, according to a research note by Kotak Institutional Equities (KIE). Asset management companies (AMCs), however, grew 44% in the first quarter of fiscal 2026, on a year-on-year basis.
The continued equity flows helped to keep the earnings buoyant for them. Recent AMFI data also suggest that AMCs have not had any major problems with respect to mobilising retail funds even in a volatile environment. This however is not the case with banks.
The continued equity rate cuts by the RBI has made fixed deposits unattractive with lower interest rates. Loan growth is also muted because of weaker demand rather than supply, KIE said in its note.
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Published – August 20, 2025 11:38 pm IST
