New Delhi, Nov. 17 -- The banking sector delivered robust earnings in the second quarter of FY26, reinforcing optimism for a stronger performance in H2FY26. Results across banks, NBFCs and diversified financials improved, confirming that the soft patch witnessed in the first half of the fiscal is now firmly behind the sector.

Banks delivered an 11% YoY and 4% QoQ credit growth, with PSU banks outperforming private peers, and Retail and secured SME segments driving momentum. Deposit growth, although trailing credit, continues to strengthen through healthier CASA accretion and disciplined mix management, helping banks defend margins more effectively than expected.

According to Axis Securities, net interest margins (NIMs) have bottomed out...