New Delhi, July 11 -- India's banking sector is expected to witness a strong recovery in earnings over the next few years, with profits projected to grow at a compound annual growth rate (CAGR) of around 15 per cent between FY26 and FY28, according to a report by Motilal Oswal Financial Services (MOFS).

The report attributed the outlook to sustained credit growth and steady expansion in net interest income, with private sector banks likely to outperform their public sector counterparts during this period, ANI reported.

Credit Growth Remains Strong

The report noted that credit growth is expected to stay in the mid-to-high teens in FY27, supported by broad-based demand across sectors. Lending to corporates and services grew by 18.7 per c...