Treasury losses haven't derailed good run of banks

With healthy credit growth, bad loans will shrink further in percentage terms, but if the banks throw caution to the winds for building loan books, such loans may resurface again and spoil the party

Except for one, all banks had made profits in FY2022. The combined net profit of the listed banks, at Rs 1.57 trillion, was at its historic high last financial year.

Many thought that the first quarter of FY23 would be a different story as treasury losses would eat into most banks’ profits and a few could even end up being in the red.

The 10-year bond yield had risen 61 basis points (bps) in the June quarter — from 6.84 per cent on March 31 to 7.45 per cent. At some point during the quarter, the rise was as high