Banking Stocks Decline Amid Disappointing Q4 Earnings Reports from HDFC Bank, Kotak, IndusInd and Yes Bank

Banking Stocks Decline Following Q4 Business Updates

Banking stocks traded lower on Monday, following the release of lenders' Q4 business updates over the weekend. The Nifty Bank index declined by nearly 0.9%, with nine out of its fourteen constituent stocks trading in negative territory. Kotak Mahindra Bank and IndusInd Bank shares led the decline, falling over 2% each.

The decline was followed by ICICI Bank, Punjab National Bank (PNB), and IDFC First Bank, which slipped more than 1% each. Meanwhile, HDFC Bank, AU Small Finance Bank, and Yes Bank were also trading in the red.

HDFC Bank's Q4 Business Updates

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HDFC Bank reported robust business growth, with average advances under management growing 10% year-on-year (YoY) to ₹29.64 lakh crore in Q4FY26. Gross advances increased 12% YoY to ₹29.60 lakh crore, while period-end deposits rose 14.4% YoY to ₹31.05 lakh crore.

Other Bank Updates

Axis Bank's Q4 gross advances grew 18.4% YoY to ₹12.44 lakh crore and total deposits increased 13.9% YoY to ₹13.35 lakh crore. CASA deposits rose 10.6% YoY to ₹5.28 lakh crore.

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Yes Bank reported Q4 loans and advances growth of 10.70% YoY to ₹2.72 lakh crore, while its deposits jumped 12.1% to ₹3.19 lakh crore. Credit to deposit ratio dipped to 85.4% from 86.5%.

Kotak Mahindra Bank reported strong credit growth aided by revival in unsecured segments. Fiscal-end CASA growth aided in healthy deposit accretion during the quarter. Its end of period net advances increased 16.2% to ₹4.95 lakh crore and deposit-end of period rose 14.7% to ₹5.72 lakh crore.

Union Bank of India's advances growth has remained healthy with strong traction sequentially, in-line with the management's strategy. Deposit growth remains weak for the bank, resulting in elevated CD ratio at 82.5% in March 2026 versus 77.3% in March 2025.

Bank of Baroda posted strong advances growth driven by the RAM segment, exceeding stated guidance of 11-13% YoY growth for FY26. Deposit growth continued to sustain traction during the quarter, remaining marginally higher than the industry growth.

Bandhan Bank's advances grew 12.6% YoY and 6.2% QoQ to ₹1,54,235 crore. Deposits grew 10% YoY and 6.1% QoQ to ₹1,66,344 cr, aided by revival in CASA accretion.

IDFC First Bank reported a healthy credit traction during the quarter. Although, deposit growth moderated sharply from the 25%+ trend in the past quarters. Deposit outflows from State government accounts after an incident of fraud at one branch and reduction in savings account rates (50-200 bps across buckets) weighed down on deposit accretion.