From The Economic Times · Saloni Shukla · · 50s
Bond Yields Surge, Banks' Treasury Income Falls
Rising bond yields could cut banks' treasury income by 60% this quarter.
In brief
Rising bond yields could cut banks' treasury income by 60% this quarter. Banks face nearly 60% drop in treasury income for July-September 2024 due to surging government bond yields. Originally reported by The Economic Times.
Bond Yields Rise
The benchmark 10-year government bond yield rose 44 basis points in the past quarter, ending September at 7.19%.
Banks' Treasury Income Falls
Banks are expected to post a nearly 60% fall in treasury income for the July-September quarter from a year earlier.
Treasury Gains Decline
Analysts at Jefferies estimate aggregate treasury gains in the fiscal second quarter to be ₹5,500 crore, down 58% from ₹13,100 crore a year earlier.
Impact on Banks
Public sector banks face sharper declines due to larger government securities portfolios and past treasury gains when yields softened.
The takeaway
Banks face nearly 60% drop in treasury income for July-September 2024 due to surging government bond yields.
