Small Finance Banks' Profits to Suffer as Funding and Credit Costs Rise
2025-01-14
Business Standard
The increasing funding and credit costs are expected to take a toll on the bottom line of small finance banks, with profitability likely to remain under pressure in the second half of FY2025, according to Manushree Saggar, Sector Head - Financial Sector Ratings at ICRA. This trend may impact their financial performance, making it challenging for them to maintain their margins. As a result, small finance banks may need to adapt to the rising costs, focusing on efficient operations and risk management to mitigate the effects on their net interest income and overall financial health, amidst the evolving banking and financial services landscape.
