Banking sector earnings likely to rebound 17% in FY27-28E, private banks to lead growth: Report

India’s banking sector earnings are expected to rebound strongly, growing about 17% CAGR over FY27-28, after a modest 3% growth in FY26, according to an IIFL Capital report. The recovery will be driven by faster loan growth, improving net interest margins, and stable asset quality, with earnings revisions turning positive and signalling an inflection point for the sector.