BNP Paribas analysts’ expect reasonable credit growth to translate into earnings growth momentum for banks in FY27 – a key re-rating catalyst
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Banks seem to have made a big push in growing business in the last fortnight of the third quarter (Q3FY26), with RBI data showing substantial jump in deposits and credit.
In the fortnight ended December 31, 2025, deposits of all scheduled banks soared by ₹7,34,623.39 crore. Loans, too, jumped by ₹6,32,756.50 crore.
In the preceding fortnight ended December 15, 2025, deposits of all scheduled banks shrunk by ₹1,66,460 crore even as loans went up by ₹1,08,415 crore.
Bankers attribute the sudden jump in business (deposits plus advances) to the quarter-end phenomenon of banks’ bulking up their balance sheet by contracting short-term business.
Referring to the YTD CY (year-to-date calendar year) 2025 incremental Credit-Deposit Ratio of 96 per cent, BNP Paribas, in a report, said this indicaties a relative increase in credit strength. Further, a slightly lower deposit/M3 (broad money) growth is linked to the same dynamics that drove liquidity strains in the last two months.
BNP Paribas analysts’ expect reasonable credit growth to translate into earnings growth momentum for banks in FY27 – a key re-rating catalyst.
Published on January 14, 2026