Indian Banks Poised for Strong Net Interest Income Growth

While leading U.S. banks are faced with declining net interest incomes (NII), driven by higher deposit costs and muted loan demand, large private sector Indian banks including—HDFC Bank (NSE: HDFCBANK), ICICI Bank (NSE: ICICIBANK), Kotak Mahindra Bank (NSE: KOTAKBANK), and Axis Bank (NSE: AXISBANK) are expected to see continued double-digit growth in NII in 2024 and beyond.

According to Visible Alpha consensus, Indian banks are expected to benefit from improved asset quality, increased deposit growth, and higher credit demand, despite rising interest rates, driving robust profit growth. In CY 2024, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, and Axis Bank are forecasted to achieve significant year-over-year NII growth of +19%, +13%, +13%, and +12%, respectively. While NII growth is expected to slow down across all four banks, growth estimates are projected to remain elevated.