New Delhi, Oct. 7 -- Bank loan growth is expected to accelerate to 19 per cent year-on-year in the September quarter, but profit growth may remain much slower at around 6 per cent as pressure on lending margins and a sharp fall in treasury income offset the benefit of stronger credit growth, according to a Jefferies India Financials Equity Research report.

Jefferies expects aggregate loans of the large banks covered in its estimates to rise 19 per cent year-on-year in the second quarter of FY27, while net interest income (NII) is projected to grow at a slower 9 per cent. Aggregate profit after tax is estimated to increase just 6 per cent year-on-year.

"We expect core profit (PBT - treasury) of large banks to grow 15% YoY," Jefferies sai...