New Delhi, Feb. 20 -- The profitability of banks improved in the third quarter, supported by higher Net Interest Income (NII), lower slippages, better recoveries, and improved fee income, reflecting continued stability in the banking sector, according to a report by Systematix Group.

The report noted that the improvement in profitability was primarily driven by strong growth in core income and better asset quality trends. Lower slippages and improved recoveries helped reduce stress on balance sheets, while higher fee income further supported overall earnings during the quarter.

It stated "Margins largely improved sequentially, expected to remain rangebound going forward".

Going forward, the report mentioned that the profitability is ex...