Mumbai, Nov. 6 -- Rising bond yields took a toll on banks' treasury earnings in the September quarter, leaving them with losses on their investment portfolios and fewer opportunities to book profits from bond sales. The hit was felt across public and private sector lenders, with the average treasury income falling 62% from a year earlier.

With yields remaining elevated, banks face the prospect of another weak quarter and the challenge of making up the lost income from other sources.

Indian banks' treasury incomes came under pressure in the three months ended September as a rise in government bond yields led to mark-to-market (MTM) losses on their investment portfolios.

Among public sector banks, State Bank of India (SBI) reported a tre...