The public sector banks (PSBs) have registered an impressive profit of over Rs 34,774 crore in the first quarter of June 2023 showcasing a substantial increase that more than doubles their previous earnings.
As per the quarterly data published by public sector banks, the collective profit reported by the 12 state-owned banks amounted to Rs 15,306 crore, during the corresponding April-June period in the prior fiscal year.
Robust Performance of State-Owned Banks in Q1
- The uptick in interest rates played to the banks’ advantage, resulting in a favorable net interest margin (NIM) for the quarter. The majority of banks achieved NIMs surpassing 3 percent.
- Notably, Bank of Maharashtra, situated in Pune, secured the highest NIM at 3.86 percent, closely trailed by Central Bank at 3.62 percent and Indian Bank at 3.61 percent for the quarter. In the initial quarter, four lenders achieved a profit growth exceeding 100 percent.
Impressive Profit Growth and Milestones: Public Sector Banks’ Performance
- Punjab National Bank achieved the highest percentage growth, marking a substantial 307 percent increase in profit, from Rs 308 crore to Rs 1,255 crore, in comparison to the corresponding quarter of the previous year.
- Following closely, the State Bank of India (SBI) reported a noteworthy 178 percent growth in its bottom line, reaching a profit of Rs 16,884 crore.
- Bank of India also demonstrated remarkable progress, experiencing a surge of 176 percent in profit to reach Rs 1,551 crore.
State Bank of India’s Remarkable Performance: Achieving Record Quarterly Profit and Dominating Public Sector Bank Profits
- The State Bank of India achieved a historic milestone, posting its highest-ever quarterly profit of Rs 16,884 crore, which constitutes approximately 50 percent of the total profit generated by public sector banks (PSBs).
- In the fiscal year 2022-23, SBI’s contribution remained significant at about 50 percent of the cumulative profit of these banks, amounting to Rs 1.05 lakh crore.
Strong Performance Among PSBs: Notable Growth Ranges and Leading Contenders
- A group of five PSBs achieve growth rates ranging from 50 to 100 percent.
- Bank of Maharashtra leads with an impressive 95 percent surge in net profit to reach Rs 882 crore.
- Bank of Baroda follows closely with an 88 percent increase, reaching Rs 4,070 crore, while UCO Bank records an 81 percent growth to Rs 581 crore.
- Among the 12 banks, only Punjab & Sind Bank, based in Delhi, experienced a 25 percent decline in net profit, reaching Rs 153 crore by the end of June 2023.
Government’s Strategic Measures for growth of Public Sector Banks
- Government’s 4R’s strategy: recognition, resolution, recapitalisation, and reforms for PSB revival.
- Enhanced credit discipline, responsible lending, and governance.
- Unprecedented Rs 3,10,997 crore infused for PSB recapitalisation from 2016-17 to 2020-21.
- Embrace of technology and bank amalgamation to restore banker confidence.
Key Points for Competitive Exams
- Recently appointed executive director of RBI: P Vasudevan
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