2025 was a year of clear winners and quiet stress in India's banking and finance world. Some groups surged ahead, while others struggled.
Public Sector Banks Shine
State‑run banks led the market. Cleaner balance sheets and steady loan growth helped them beat most private rivals.
- Canara Bank rose almost 50%.
- Bank of India gained about 40%.
- State Bank of India (SBI) ended the year up more than 22%.
Improving asset quality and consistent credit growth gave investors confidence in these PSUs.
Private Banks Show Mixed Results
Not all private lenders performed the same.
- AU Small Finance Bank jumped over 75%.
- RBL Bank surged nearly 92%.
- Bandhan Bank and IndusInd Bank lagged, pressured by profit and growth concerns.
NBFCs: Winners and Losers
Large, well‑capitalised non‑bank lenders posted big gains, while smaller players tied to micro‑finance struggled.
- L&T Finance rose more than 120%.
- Bajaj Finance climbed close to 48%.
- Shriram Finance added over 60%.
- Mahindra & Mahindra Financial Services and Manappuram Finance each grew over 50%.
NBFCs focused on vehicle finance, gold loans and diversified retail products are expected to grow assets under management at about 21% CAGR through FY28.
Wealth Managers and Asset Managers
Companies that handle wealth and investments also did well.
- Anand Rathi Wealth up 52%.
- Choice International and Multi Commodity Exchange posted strong gains.
- HDFC AMC rose nearly 27%, while some peers lagged due to market consolidation.
Regular savings plans, retirement funds and wealth‑management services kept expanding even when markets were volatile.
Insurance Sector Faces Mixed Outlook
Life and health insurers got a boost from a GST exemption, helping demand and lifting stocks like SBI Life and HDFC Life by up to 11%. However, losing input‑tax credits cut profit margins by 180–450 basis points, keeping investor sentiment cautious.
What to Expect in FY26 and Beyond
Analysts see a smoother road ahead:
- Bank credit growth likely to settle around 11.5‑12.5%, driven by retail and MSME loans.
- Deposit growth may still lag loans, putting some pressure on margins.
- Overall asset quality is expected to stay stable, and funding costs should ease.
- NBFCs are positioned for a rebound, with lower funding costs and normalising credit costs.
In short, public banks and big NBFCs look like the steadier bets, while micro‑finance and some insurance stocks may need more time to recover.
Disclaimer
Remember, this is perspective, not a prediction. Do your own research and consider your risk tolerance before making any investment decisions.