Mumbai, July 14 -- Banks are expected to see weak growth in the first quarter of FY26 due to pressure on margins, rising credit costs and cyclically slower business during this period.

"Q1FY26 is expected to be a muted quarter with most banks juggling with many adversely moving aspects such as slowing advances growth, margin pressure from consecutive repo rate cuts, seasonally weak fee income, annual appraisal-related expenses in operating expenses, and sustained elevated credit costs for unsecured credit segments," Systematix Research said in a pre-earnings note.

Provisional business updates by banks for Q1FY26 showed weak loan growth in Q1 even as deposits picked up pace, Mint reported on 4 July, 2025. Initial estimates showed sequent...