India, July 13 -- Banks are likely to report mark-to-market (MTM) gains on investment portfolios in the April-June period of the current fiscal year as Government bond yields softened sharply after surging in the preceding quarter, analysts said.

However, these gains' influence on profitability is expected to be limited because of the accounting treatment of investments, according to the analysts.

"The yields softened in Q1 FY2027 after having risen sharply towards the end of Q4 FY2026. Consequently, banks are expected to witness mark-to-market (MTM) gains on their investment portfolios. However, the impact of same on profitability may be only partial, as fair value changes on investments classified under the Available for Sale (AFS) ca...