Private banks’ mcap fell in Jul-Sep: S&P

Private sector banks slipped in market capitalisation (mcap) during the July-September quarter, underperforming their government-owned peers as trade uncertainties dragged market sentiment, said S&P Global Market Intelligence.

Illustration: Uttam Ghosh

According to its analysis, HDFC Bank shed 4.8 per cent in mcap during the third quarter, while ICICI Bank’s dropped 6.7 per cent.

Other private sector lenders, such as Kotak Mahindra Bank and Axis Bank, also posted declines in mcap in the third quarter compared to the previous three months, the data shows.

Private sector lenders posted mcap gains during April–June, buoyed by rate cuts and high liquidity in the banking system.

With relatively higher exposure to corporate lending, they fared worse than their state-owned peers.

Government-owned banks have a greater share of retail loans, especially in smaller Indian cities.

There, local factors such as agricultural output and rural demand play a bigger role than external trade.

Domestic equity markets faced headwinds as US President Donald Trump imposed 50 per cent tariffs on Indian goods.

The tariffs on India are among the highest for key trading partners of the US.

Exporters have been scrambling for newer markets, while trade negotiators are in touch for a US-India deal.

The Reserve Bank of India’s (RBI’s) Monetary Policy Committee said that “growth outlook remains resilient, supported by domestic drivers, despite weak external demand.”

It is likely to get further support from a favourable monsoon, lower inflation, monetary easing and the salubrious impact of recent GST reforms.

State Bank of India (SBI), India’s largest bank by assets, added 10 per cent in market cap during the third quarter.

Among its public sector peers, Bank of Baroda gained 3.9 per cent and Punjab National Bank added 2.1 per cent.

Canara Bank gained 8.3 per cent.

Meanwhile, Indian Bank posted a 16.7 per cent increase in market cap in the third quarter, the highest among the top 20 Indian lenders ranked by market cap.

On the other hand, private lender IndusInd Bank was the worst performer during Q3, shedding 15.7 per cent of its mcap and slipping one rung to the 14th position.

The Mumbai-based lender disclosed a series of accounting lapses earlier in 2025.

Overall, 12 of the 20 banks lost mcap during the third quarter, compared to only two in the previous three months.