Finsamudra Desk
FY26 data shows private banks extracting far more profit per branch than public sector peers, pointing to a widening digital cross-sell gap in Indian banking.
In FY26, Kotak Mahindra Bank reported the highest profit per branch among major Indian lenders at ₹8.5 crore, ahead of HDFC Bank at ₹7.8 crore and ICICI Bank at ₹7.2 crore.
Public sector banks trail well behind. State Bank of India posted ₹3.7 crore per branch, Bank of Baroda ₹2.3 crore, and Union Bank of India ₹2.2 crore. Axis Bank sits between the two groups at ₹4.2 crore.
The gap between the top private banks and large public sector banks runs to nearly 3x to 4x on a per-branch basis.
The explanation offered is structural rather than purely locational: private banks use branches to acquire and build trust with customers, then cross-sell high-margin products like mutual funds, credit cards, and insurance digitally. Public sector banks continue to carry the transactional load of servicing large volumes of basic savings and agricultural accounts at the counter.
For DSAs and connectors, profit-per-branch is a signal of which institutions have spare capacity and appetite to reward digital-first origination. Lenders extracting more profit per branch through digital cross-sell are structurally better placed to fund attractive payouts on loans, cards, and insurance sourced through partner channels.
Public sector banks carrying heavier low-margin transactional overhead may be slower to digitize origination and cross-sell, which affects how quickly connectors see technology-led improvements in turnaround time, commission structures, and product bundling from these lenders.
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