Margins may stay under pressure in FY27 as banks brace for West Asia risks, ECL transit...

This report covers key India-focused updates related to loans, EMI, interest rates and banking. Margins may stay under pressure in FY27 as banks brace for West Asia risks, ECL transition: Report For SBIN, AXIS Bank and Indian Bank, the sequential decline in Yield on Advances was steeper than peers During the March quarter, Indian banks managed to keep asset quality largely stable, shrugging off worries faced due to the ongoing Gulf war. Brokerage firm Systematix warned that the true impact of the West Asia conflict was likely to surface only in the second half of the financial year 2026-27. Despite this, the brokerage maintained a constructive outlook on the sector, citing buffers from government schemes like CGSMFI 2.0 and ECLGS 5.0. "The repo rate cut of 25 basis points in December weighed on yields in the March quarter, with the full impact flowing through to the Yield on Advances (YoA)," Systematix noted.