PB Fintech's net profit grew by 43% in the second quarter of fiscal year 27

Indian Overseas Bank (IOB), based in Chennai, reported a 56% increase in net profit during the second quarter of the fiscal year 27, reaching 1963 crore rupees. This growth compared to 1259 crore rupees in the quarter from July to September of fiscal year 26, and is attributed to increased interest income and improved asset quality.

The bank's total income for the reporting period increased by 13%, amounting to 10,428 crore rupees. IOB's interest income in Q2 FY27 rose by 17% to 9,201 crore rupees, compared to 7,851 crore rupees in the same period last year.

Ajay Kumar Srivastava, Managing Director and CEO of IOB, noted that net interest income grew by 26% during the quarter. He also highlighted the good asset quality and low write-off levels in the system.

Net Interest Income (NII) for the quarter increased by 26.4% to 3,867 crore rupees, compared to 3,059.3 crore rupees a year earlier. Srivastava added that write-offs remained under control at 240 crore rupees, and the provisioning ratio was only 0.07%, which is one of the lowest in the banking system, and the bank consistently maintains this figure.

The Non-Performing Asset (NPA) ratio decreased by 64 basis points (bps) year-on-year (Y-o-Y) to 1.19%, while the Net NPA ratio fell by 12 bps year-on-year to 0.16%. Credit costs also decreased by 1 bp year-on-year to 0.17%. During the quarter, 647 crore rupees were recovered against NPAs, which is 2.95 times higher than quarterly write-offs. The Capital to Risk-Weighted Assets Ratio (CRAR) increased by 66 bps year-on-year to 18.60%. Return on Assets (RoA) improved to 1.53% from 1.20% last year, which is 33 bps higher. Return on Equity (RoE) grew to 24.58% from 19.95% last year, an increase of 463 bps.

The bank's total deposits increased by 20.16% to 4.07 trillion rupees from 3.39 trillion rupees. Current Account Savings Account (CASA) deposits also grew by 20.73% year-on-year to 1.65 trillion rupees, and the internal CASA ratio improved by 13 bps year-on-year to 41.14%. The volume of loans disbursed in Q2 FY27 reached 3.45 trillion rupees, showing a growth of 24.35% compared to 2.77 trillion rupees last year.

Srivastava stated that, according to preliminary estimates, IOB will require additional provisioning of about 2,600–2,800 crore rupees under Expected Credit Losses (ECL). He clarified that the bank has already created ECL provisions of about 2,700 crore rupees, meaning that 100% of the required amount is already secured in the balance sheet as projected ECL reserves.

Furthermore, he mentioned the successful performance of the gold loan portfolio and the development of several programs to meet the needs of various segments of society with competitive interest rates. Srivastava added that the jewelry loan portfolio is very sound, with outstanding loans amounting to nearly 1.36 trillion rupees, and shows no signs of stress. The bank maintains a Loan-to-Value (LTV) ratio of about 60–62%, which adequately accounts for price fluctuations.

Mahindra & Mahindra Financial Services (Mahindra Finance) reported a 55% year-on-year growth in its net profit, reaching 882 crore rupees for the quarter from July to September of fiscal year 27 (Q2FY27).

During this quarter, total income increased by 15% year-over-year to 5,175 crore rupees, and the volume of loans disbursed grew by 22% to 16,499 crore rupees. Meanwhile, the Net Interest Margin (NIM) remained unchanged at 7% in Q2FY27 compared to the same quarter last year.

Assets under management (AUM) increased by 15% year-over-year, reaching 1.46 trillion rupees. The cost of credit losses decreased to 1.6% of average assets in Q2FY27, compared to 2.2% a year earlier.

The asset quality of this Non-Banking Financial Company (NBFC) improved during the reporting period. The proportion of Stage 3 assets decreased from 3.9% to 3.4%, and the proportion of Stage 2 assets fell from 5.8% to 4.7%. Collection efficiency improved to 97% from 96% in Q2FY26.

The company's capital adequacy ratio stood at 18%, with Tier-I capital reaching 16.2%. Diversification beyond vehicle financing continued to gain momentum: the volume of loans disbursed in non-transport segments grew by 52% year-on-year. These areas include MSME lending, personal loans, and other segments, including Mahindra Rural Housing Finance (MRHFL).

Rahul Rebelo, Managing Director and CEO of Mahindra Finance, noted that the second-quarter results provide confidence that the ongoing changes are leading to stronger and more stable business performance. He added that the company is encouraged by the growth rate driven by a 22% increase in disbursements, credit cost control at 1.6%, and 55% profit growth, and maintains focus on disciplined execution of plans until fiscal year 31.

The private lender Federal Bank reported a significant increase in net profit, which reached a record 1,386 crore rupees in July-September 2026 financial year (Q2FY27). This growth was 45.1% compared to the same period last year and was driven by a strong increase in net interest income, growth in commission receipts, and improved asset quality.

Net Interest Income (NII), which is the difference between interest earned and paid, increased by 26.4% year-on-year, reaching 3,153.4 crore rupees. Other bank revenues grew by 37.7% to 1,490.4 crore rupees, with commission receipts increasing by 31.9% to 1,167.7 crore rupees. During the quarter, the Net Interest Margin (NIM) expanded by 26 basis points (bps) to 3.32%.

MD and CEO of Federal Bank, K. V. S. Manian, noted that the bank had previously forecasted an improvement in NIM by five to six basis points over the last two quarters, and the bank continues to adhere to this forecast.

Improvement in Asset Quality

The bank's asset quality continued to improve: the Gross Non-Performing Assets (GNPA) ratio decreased to 1.32% as of September 30, 2026, compared to 1.52% on June 30, 2026. The Net NPA ratio reduced to 0.17% from 0.18%. The bank reported that both these indicators are at their lowest level in the last decade.

A reduction in fresh slippages amounted to 27.5% year-on-year, reaching 420 crore rupees, and the provisioning ratio fell to 0.59% from 0.94% the previous year. Credit costs decreased by 19 bps to 0.31%.

The bank's deposits grew by 18.6% to 3.43 trillion rupees. Low-cost Current Account and Savings Account (CASA) deposits increased by 22.6% year-on-year, reaching 1.1 trillion rupees, raising the CASA ratio to 32.04%, which is 103 bps higher than last year. Non-resident deposits, including NRE and other non-resident deposits, grew by 26.6% to 1.19 trillion rupees.

The total volume of loans disbursed exceeded 3 trillion rupees, reaching 3.02 trillion rupees. Among lending segments, gold loans grew by 37.1% year-on-year, and Loan Against Property (LAP) increased by 32.2%. Credit cards grew by 28.3%, and commercial banking loans grew by 25.5%. Corporate and institutional banking loans increased by 17.2% to 1.05 trillion rupees.

The bank's capital adequacy ratio stood at 16.84% as of the end of September 2026, and the Tier-I capital ratio reached 15.76%.

Impact of Regulatory Changes

Regarding the impact of the proposed consultative document from the insurance regulator on the distribution structure, as well as on the bank's insurance subsidiary, Ageas Federal Life Insurance, Manian stated that the bank is assessing this impact, which will depend on the final rules. He emphasized that 'there may be an impact, but it is too early to quantify it. The bank will await the finalization of guidelines and clarification of implementation timelines.'

Manian added that the bank is in the process of evaluating the situation as management is still in the project stage. He also mentioned that the bank is continuously exploring opportunities, but there is nothing to disclose at this time. The bank is looking at prospects in the financial services sector, including universal and retail banking.