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Macquarie Favors Banks Over NBFCs, Predicts Strong Earnings Growth in FY28
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CNBC TV18•14-10-2026, 12:36
Macquarie Favors Banks Over NBFCs, Predicts Strong Earnings Growth in FY28
- •Macquarie expects the banking sector to benefit from rising interest rates, projecting robust 18 percent to 20 percent earnings growth in FY28.
- •Private sector banks are expected to see a reported net interest margin compression of 10 to 20 basis points in the July-September 2026 quarter due to FCNR-related liquidity.
- •Macquarie's top largecap banking picks include ICICI Bank, Kotak Mahindra Bank, and State Bank of India, alongside City Union Bank among smaller banks.
- •Non-banking financial companies could face pressure from higher funding costs, potential rural distress, and a slower rural economy in a rising rate environment.
Key Questions Answered
Macquarie expects the banking sector to achieve a strong 18% to 20% earnings growth in financial year 2028 (FY28) as rising interest rates gradually reflect in lending yields.
Banks are better positioned to benefit from rising interest rates supporting margins, whereas non-banking financial companies (NBFCs) face pressure from higher funding costs and a slower rural economy.
Macquarie's preferred largecap banking stocks are ICICI Bank, Kotak Mahindra Bank, and State Bank of India (SBI), alongside City Union Bank in the smaller bank category.
