New Delhi, Oct. 27 -- India's banking sector is expected to maintain resilient profitability in FY27, even as rising geopolitical risks pose challenges, according to a report by Boston Consulting Group (BCG).

"Credit demand, margin recovery and benign asset quality support a resilient profitability outlook for FY27," it said.

The report noted that with West Asia accounting for 14-20 per cent of India's trade, rising oil prices could widen the current account deficit (CAD), fuel inflation and weaken consumption, posing risks to several sectors.

This could adversely affect banking sector credit growth and potentially lead to increased loan slippages across various sectors.

However, it noted, "Credit growth should hold in the high teens ...