New Delhi, Sept. 30 -- Credit costs in Indian banks are expected to continue in declining trend in the second half of the current financial year 2025, though near-term slippages are likely to remain elevated, according to a report by global financial services firm UBS.

The report highlighted that while credit costs are expected to ease in H2FY26 compared to FY25, the near-term asset quality pressure, especially for banks, will persist due to high forward flows.

It stated "We continue to expect a decline in credit costs in H2FY26 (vs FY25) but expect near-term slippages (Q2) to remain elevated due to high forward flows, especially for banks".

It emphasized that monitoring of PAR (Portfolio at Risk) 1-90 trends remains crucial, particula...