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Slower deposit growth, likely decline in fee income, rising operational expenses and increasing number of so called credit tested customers is likely to impact bank profitability in the next couple of years, consultancy firm McKinsey & Co said. It expects banks return on asset (RoA) to drop to 0.80% to 1% range in the next two years from 1.1% at the end of fiscal 2023.

Slower deposit growth, likely decline in fee income, rising operational expenses and increasing number of so called credit tested customers is likely to impact bank profitability in the next couple of years, consultancy firm McKinsey & Co said. It expects banks return on asset (RoA) to drop to 0.80% to 1% range in the next two years from 1.1% at the end of fiscal 2023.