New Delhi, April 15 -- The Indian banking sector is expected to post subdued earnings growth in Q4FY25, driven by modest loan and deposit growth, pressure on net interest margins (NIMs), and rising slippages in unsecured and microfinance segments. However, improved recoveries and regulatory changes may aid credit costs.

According to Motilal Oswal Financial Services (MOFSL), net interest income (NII) for its banking coverage universe is estimated to rise 3.9% YoY in Q4FY25, while pre-provision operating profit (PPoP) may decline 0.7% YoY but grow 3.5% sequentially. Private banks' profit after tax (PAT) is expected to fall 3% YoY, while PSU banks may post a 4.5% YoY earnings growth.

Overall earnings for MOFSL's banking universe are seen r...