Private bank ETFs back in focus as valuations turn attractive

Private bank ETFs are regaining investor interest as valuations have de-rated to multi-year lows, with the private bank index trading at a price-to-book of 2.07 against a 10-year average of 2.9. Fund managers from Mirae Asset, Mahindra Manulife, and DSP Mutual Fund expect a re-rating driven by NIM stabilization after the trough, strong credit growth of 16-18 percent, and improving earnings. The top 5 constituents — HDFC Bank, ICICI Bank, Axis Bank, Kotak Bank, and Federal Bank — account for 87 percent of the portfolio, and credit growth has already reaccelerated from 9.0 percent in mid-2025 to 17.7 percent by June 2026.