1. Which bank did the best in Q2 FY26?
SBI emerged as the clear winner in the September 2025 quarter, posting a 10% profit rise backed by strong credit growth, stable asset quality, and an exceptional gain from its Yes Bank divestment.
2. Why did the profit at Kotak Mahindra Bank fall this quarter?
The major reasons for a decline in Kotak’s profit were a 43.5% rise in provisions related to Alternative Investment Fund exposures. Despite healthy loan growth, higher provisioning weighed heavily on its earnings.
3. How did HDFC Bank compare to SBI and Kotak?
HDFC Bank reported a 10.8% year-on-year growth in profit, but margin pressure and higher provisions took a toll. While its performance was steady, it was more conservative compared to SBI’s stronger showing.
4. What caused the decline in NIMs across Indian banks?
The cut in the repo rate by RBI in June 2025 led to lower lending rates, but deposit rates fell more slowly. This mismatch squeezed the margins for both public and private sector banks temporarily.
5. Is SBI a better long-term investment than HDFC or Kotak?
Analysts believe SBI is attractively valued at 11x P/E, as per the fiscal year 2024 estimates, versus 21x for HDFC and 22x for Kotak. With strong fundamentals, improving margins, and PSU momentum, SBI appears promising for the long-term investor.
