Bank, NBFC shares rise for 10th straight session; Kotak Mahindra Bank, Axis Bank among top gainers: Here's why

Nifty Bank index has gained nearly 3 percent over the last 10 sessions, while the Nifty Financial Services index rose about 4 percent during the same period.

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26 Aug, 2025 12:21

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Bank and non-banking financial company (NBFC) stocks advanced for the tenth consecutive session on Tuesday, with Kotak Mahindra Bank and Axis Bank among the major gainers.

The Nifty Bank index has gained nearly 3 percent over the last 10 sessions, while the Nifty Financial Services index rose about 4 percent during the same period.

On September 16, Kotak Mahindra Bank led the pack in the Nifty Bank index, climbing 2.5 percent. Axis Bank, Canara Bank, State Bank of India and IndusInd Bank also posted gains of up to 1.5 percent.

In the Nifty Financial Services index, Cholamandalam Investment and Finance Company rose nearly 4 percent to Rs 1,575.20 per share on the NSE.

The rally comes after global brokerage Nomura said it expects loan growth for Indian banks to pick up over the medium term, supported by stabilising asset quality in unsecured retail loans, gradual recovery in microfinance and a favourable policy backdrop.

According to Nomura, India’s retail lending ecosystem is showing improvement across key segments, with stress easing in unsecured loans and early delinquencies moderating in credit cards, Business Standard reported.

The uptrend was also aided by the government’s decision to rationalise goods and services tax rates across several products and sectors on September 3, a move analysts say could boost automobile and consumption loans from the December quarter.

Motilal Oswal Financial Services noted that consensus estimates point to muted earnings growth of 2 percent in FY26, followed by a rebound of 16 percent in FY27, aided by deposit repricing, a possible cash reserve ratio cut and lower credit costs.

Additionally, an ICRA report released recently projected incremental bank credit to rise to Rs 19-20.5 lakh crore in FY26 from Rs 18 lakh crore in FY25, implying year-on-year growth of 10.4-11.3 percent compared with 10.9 per cent in FY25.

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