Private banks' mcap fell in Jul-Sep: S&P

Core Insights - Private sector banks experienced a decline in market capitalization during the July-September quarter, underperforming compared to government-owned banks due to trade uncertainties affecting market sentiment [1][4] Market Capitalization Performance - HDFC Bank's market capitalization decreased by 4.8% in Q3, while ICICI Bank's fell by 6.7% [3] - Other private sector banks, including Kotak Mahindra Bank and Axis Bank, also saw declines in market capitalization during the same period [3] - In contrast, state-owned banks like State Bank of India (SBI) increased their market capitalization by 10% in Q3, with Bank of Baroda gaining 3.9%, Punjab National Bank adding 2.1%, and Canara Bank increasing by 8.3% [6] Factors Influencing Performance - Private sector banks, with higher exposure to corporate lending, performed worse than state-owned banks, which have a larger share of retail loans, particularly in smaller cities where local factors are more influential [4] - The imposition of 50% tariffs on Indian goods by the US has created headwinds for domestic equity markets, prompting exporters to seek new markets [5] - The Reserve Bank of India's Monetary Policy Committee indicated that the growth outlook remains resilient, supported by domestic factors despite weak external demand [5] Notable Performers and Decliners - IndusInd Bank was the worst performer among private lenders, losing 15.7% of its market capitalization and dropping to the 14th position, following disclosures of accounting lapses [7] - Overall, 12 out of the 20 banks lost market capitalization in Q3, a significant increase from only two in the previous quarter [7]