Private Banks Drag Down Indian Banking Sector Amid Crude Oil Price Surge
The banking and finance sector in India experienced its lowest earnings season of Q1 FY27, as results from private banks revealed margin pressure rather than profit growth. The week saw a sharp decline in crude oil prices, which rose from near $90 per barrel to above $100 by Friday, affecting the rupee's value further. Foreign Institutional Investors (FIIs) remained net sellers throughout the period.
The Bank Nifty index fell across every session of the week, with five major players declaring results on Saturday, July 18. HDFC Bank reported a 5% year-on-year rise in standalone net profit to Rs 19,060 crore, while ICICI Bank's results showed a 15.9% year-on-year increase in standalone net profit to Rs 14,804.50 crore.
Axis Bank recorded a 22.5% year-on-year jump in standalone net profit to Rs 7,114 crore for Q1 FY27. However, Kotak Mahindra Bank's results showed a 26% year-on-year rise in standalone net profit to Rs 4,123 crore.
The selloff continued throughout the week, with HDFC Bank shares falling by over 1% in early trade on Friday after three US law firms announced separate investigations into potential federal security law violations. Other private bank stocks also saw significant declines, including ICICI Bank and SBI.