Bank of India(BoI) Q1 Results: Net profit jumps 176%

 

Public sector lender Bank of India on July 28 reported a 176 percent jump in net profit at Rs 1,551 crore in the first quarter of the current fiscal. It had clocked a net profit of Rs 561 crore in the year-ago quarter.

The bank's net interest income increased by 45 percent on a year-on-year basis (YoY ) to Rs.5,915 crore.

The net interest margin (NIM) increased by 51 bps to 3.37 percent in the April-June FY24 quarter against 2.87 percent in the corresponding quarter last year.

The gross non-performing assets of the bank declined to 6.67 percent from 9.30 percent in the same quarter of the previous year, while its net non-performing assets (NNPAs) declined by 1.65 percent from 2.21 percent last year.

Domestic deposits of the bank increased by 7.98 percent YoY to Rs.5.89 lakh crore in the quarter. Current account and savings account (CASA) went up by 7.56 percent YoY to Rs. 2.6 lakh crore in the April-June FY24 quarter and CASA ratio stood at 44.52 percent.

Domestic advances increased by 7.98 percent YOY to Rs. 4.33 lakh crore.

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Indian Bank Q1 results: Net profit rises 41%

Chennai-based Indian Bank on July 27 reported a 40.8 percent rise in net profit at Rs 1,708.8 crore for the April-June quarter of FY24, as against Rs 1,213 crore a year ago.

The public-sector lender's gross non-performing assets (GNPA) declined to 5.47 percent from 8.13 percent during the quarter, while net non-performing assets (NNPA) fell to 0.70 percent from 2.21 percent.

Indian bank's Net Interest Income (NII) has jumped 26 percent to Rs. 5703 in June 2023 from Rs. 4534 in June 2022. However, CASA deposits increased by 5 percent y-o-y to Rs. 250242 crores in June 2023. The provision coverage ratio (PCR) has improved by 702 bps YOY 95.10 percent from 80.80 percent in June 2022.

Total income in the first quarter of the current fiscal rose to Rs 14,759 crore as against Rs 11,758 crore, Indian Bank said in a regulatory filing. The lender's interest income also increased to Rs 13,049 crore from Rs 10,153 crore in the same quarter a year ago.

However, the capital adequacy ratio of the bank declined to 15.78 per cent at the end of June compared to 16.51 per cent in the year-ago period.

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Punjab National Bank(PNB) Q1 Results: Net profit rises 307%, asset quality healthy

Punjab National Bank (PNB) on July 26 reported a 307 percent rise in net profit at Rs 1255.41 crore for the April-June quarter of FY24 as against Rs 308.44 crore a year ago.

The public-sector lender's gross non-performing assets (GNPA) declined to 7.73 percent from 11.2 percent in this period and the net non-performing assets (NNPA) fell to 1.98 percent from 4.28 percent.

The net interest income of the bank, difference between interest earned and interest expended, was reported at 9504 crore in the April-June quarter compared with Rs 7543 crore in the year-ago quarter.

New Delhi-based bank's Provision Coverage Ratio improved by 679 bps on YoY basis to 89.83 percent as on June’23 from 83.04 percent as on June’22.

The slippage ratio improved to 1.19 percent in Q1 FY24 from 3.75 percent in Q1FY’23. Housing loan increased by 12.5 percent on YoY basis to Rs 83,893 Crore. Moreover, vehicle loans increased by 27.1 percent on YoY basis to Rs 17,093 Crore and personal loans increased by 46.4 percent on YoY basis to Rs 18,940 Crore.

Savings deposits increased to Rs 4,64,004 Crore as on June’23 from Rs 4,47,258 Crore as on June’22.

Bank has currently, 10080 domestic branches which comprise 3898 rural (39%), Semi-Urban: 2456 (24%), Urban 1998 (20%) Metro: 1728 (17%) and 2 International Branches.

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This Public Sector Bank was top lender to state-backed corporations and PSUs in FY23

Public Sector Banks (PSBs) lent ₹4.12 trillion to state-backed corporations and public sector undertakings during 2022-23, down from ₹4.93 trillion during the previous year, finance minister Nirmala Sitharaman informed Parliament in a written response on Monday.

Responding to questions by member of parliament, Velusamy P, Sitharaman informed the Lok Sabha that Canara Bank led the lending during 2022-23 to government backed entities at ₹187,813 crore during the recently concluded fiscal year, followed by Punjab National Bank ( ₹70,142.5 crore), State Bank of India ( ₹66,523.2 crore), Bank of India ( ₹25,147 crore), Bank of Baroda ( ₹15,706.8 crore), Union Bank of India ( ₹12,584.8 crore), Bank of Maharashtra ( ₹10,822.7 crore), Indian Bank ( ₹9,021 crore), Indian Overseas Bank ( ₹7,490 crore), Central Bank of India ( ₹3,949 crore), UCO Bank ( ₹2,939.4 crore), Punjab and Sind Bank ( ₹87.7 crore).

Meanwhile, the finance minister informed the Lok Sabha that public sector banks (PSBs) will have to take steps to adopt a focused approach on ease of service delivery and customer protection, follow regulatory norms, adopt robust risk management practices, focus on increasing rural, agriculture and sectoral credit to meet the Priority Sector Lending targets.

In  a meeting held between the top PSB bank executives and top finance ministry officials, including the finance minister, on 6 July, it was decided that the sponsor banks of the Regional Rural Banks (RRBs) will take steps for technological upgradation of the RRBs to make them more efficient, Sitharaman said in a written reply.

“Performance under PM SVANidhi scheme, which was started to support COVID affected street vendors to restart their businesses, was noted, wherein 50.57 lakh loans have been disbursed, amounting to ₹6,482 crore, to 38.5 lakh street vendors as on 20.7.2023," she said.

Financial performance of PSBs was also noted which showed that all the major financial parameters have significantly improved, she said.

The PSBs have posted record aggregate net profit of ₹1.04 trillion in FY2022-23, she added.

Meanwhile, Sitharaman also informed parliament that The National Asset Reconstruction Company Ltd (NARCL) has as of 17 July acquired three borrower entities -- Jaypee Infratech Ltd, SSA International Ltd, Helios Photo Voltaic Ltd-- with an aggregate debt exposure of ₹21,349 crore.

“NARCL has further informed that these assets have been acquired only in the fourth quarter of the financial year (FY) 2022-23, and no recovery has been made in these accounts as of 17.7.2023," she said.

“Further, in respect of one more account, i.e. SPML Infra Ltd, letter of approval for debt acquisition of ₹1,994.90 crore has been issued by the lenders, and in-principal approval for the government guarantee has also been issued," she added.

Sitharaman further added that comprehensive measures have been taken by the government and the Reserve Bank of India (RBI) to recover the bad debts, due to which scheduled commercial banks have recovered a total amount of ₹ 7.16 trillion (provisional data for FY 2022-23) during the last five financial years.

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Canara Bank Q1 results: Net profit jumps 75% YoY ; asset quality improves

Canara Bank on July 24 reported a 74.8 percent year-on-year (YoY) rise in profit after tax at Rs 3,534.84 crore in the first quarter of the current financial year, boosted by an increase in net interest income and improvement in interest margins and asset quality.

The state-owned lender reported a net profit of Rs 2,022.03 crore in the year-ago period.

The Bengaluru-headquartered lender's assets quality improved in the June quarter, with gross non-performing assets (NPAs) ratio at 5.15 percent against 5.35 percent in the previous quarter and 6.98 percent in the year-ago period.

The net NPA ratio stood at 1.57 percent, better than 1.73 percent in the previous quarter and 2.48 percent in the year-ago period.

The improvement in asset quality is beneficial to a bank as fewer risky assets tend to bring down the outstanding risk-weighted assets, saving the capital for the lender.

In absolute terms, the bank's gross NPA stood at Rs 45,727 crore as on June 30, against Rs 54,734 crore in the year-ago period. The net NPA too was down at Rs 13,461 crore from Rs 18,505 crore.

In the reporting quarter, the net interest income, the difference between the interest earned on loans and paid to depositors, rose 27.72 percent on-year to Rs 8,666 crore.

The total interest income of the bank was Rs 25,004 crore in the April-June quarter, up from Rs 18,177 crore in a year ago period.

The net interest margin, an important profitability marker, was at 3.05 percent, up from 2.95 percent in the previous quarter and 2.78 percent in a year-ago period.

The global deposits of the bank rose 6.65 percent on-year to Rs 11.92 lakh crore, while domestic deposits were up 4.9 percent on-year to Rs 11.05 lakh crore.

in April-June, term deposits of state-owned lender rose 6.98 percent to Rs 7.04 lakh crore.

On the advances front, global gross advances surged 13.27 percent on-year to Rs 8.88 lakh crore and domestic gross advances rose 12.69 percent on-year to Rs 8.18 lakh crore.

In April-June, Canara Bank reported a 71.01 percent on-year fall in its treasury income to Rs 536 crore. In treasury income, profit on exchange transactions halved 75.21 percent on-year to Rs 236 crore and profit on sale of investment fell 66.93 percent on-year to Rs 294 crore, according to the investors presentation.

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PM Modi told about Public sector banks

 

Prime Minister Narendra Modi on July 22 hit out at the previous UPA government, saying while it destroyed the banking sector with "scams" his dispensation has restored its good financial health, with India now known for the sector's strength.

Addressing a Rozgar Mela after giving appointment letters to over 70,000 recruits virtually, Mr. Modi noted that a large number of them have been employed in the banking sector as he highlighted how it was "destroyed" under the previous dispensation before his government took corrective measures.

He said that the "phone banking" scam was one of the biggest scams of the previous government as it broke the back of the banking system.

The idea of phone banking was different for that government as loans of thousands of crores of rupees were given to favourites of some powerful leaders and families, and those loans were never meant to be returned, he said.

His government, Mr. Modi asserted, took several measures, including strengthening the management of banks, merging small banks and injecting professionalism, to help the sector.

Public sector banks were earlier known for losses running into thousands of crores of rupees and non-performing assets (NPAs), but now they are known for record profits, the Prime Minister said.

He also praised banking sector employees for their hardwork and commitment to serve people and execute various government schemes to help the poor and unorganised sectors through loans under the 'Mudra' scheme and to support women self-help groups.

Mr. Modi said India has emerged as a centre of global trust and attraction, adding that the country has to make full use of it. Opportunities are increasing in various fields, he said.

Speaking on the efforts for the betterment of the MSME sector, the prime minister mentioned Mudra Yojana which provided collateral-free loans to the enterprising youth. He praised the banking sector for making the scheme a success. Similarly, the banking sector rose up to the occasion when the government doubled the loan amount for women Self Help Groups and helped the MSMe sector by providing loans which saved 1.5 crores jobs by protecting small enterprises.

He also thanked the bank employees for making PM Kisan Samman Nidhi a grand success. More than 50 lakh Street Vendors were helped in the SVANidhi Scheme. “I am sure, you will take a ‘Sankalp Patra (resolution letter) for making banking a tool of empowerment of the poor along with your ‘Niyukti Patra’ (appointment letter).

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Union Bank Of India Q1 Results: Profit more than Doubles, Provisions Drop

 

Union Bank of India on July 20 reported a more than 107 percent on-year rise in its standalone net profit to Rs 3,236.44 crore in the first quarter of the current financial year.

This is on the back of improvement in the asset quality, lower provisions and increase in net interest income.

In the similar period last year, the state-owned lender reported Rs 1,558.46 crore profit.

On a sequential basis, net profit rose 16.32 percent, Union Bank of India said in an exchange filing.

In the reporting quarter, the net interest income of the lender increased 16.59 percent on-year to Rs 8,840 crore. Similarly, on the sequential basis, it rose 7.14 percent.

While, the non-interest income of the bank rose 38.57 percent on-year in April-June quarter to Rs 3,903 crore. However, it fell sharply over 25 percent on-quarter.

The net interest margins of the bank increased to 3.13 percent in June quarter, which is up 13 basis points (Bps) on-year, and 15 bps on-quarter.

In the similar quarter last year, the state-owned lender reported net interest margins of 3.00 percent. One basis point is one hundredth of percentage point.

Net interest margins is a measure of difference between interest earned by the lender and interest it pays out to its lenders.

Asset quality

In April-June quarter, Union Bank of India reported an improvement in the asset quality, with gross non-performing asset (NPA) ratio improved by 288 bps and net NPA decreased by 173 bps compared to year ago period.

According to the press release, gross NPA of the bank fell to 7.34 percent as on June 30, as compared to 7.53 percent in the previous quarter, and 10.22 percent in a year ago period.

Similarly, net NPA of the bank decreased to 1.58 percent in April-June quarter, as against 1.70 percent quarter ago.

In absolute terms, gross NPA stood at Rs 60,104 crore, down 19.32 percent on-year, and net NPA stood at Rs 12,138 crore, down 45.79 percent, as per press release.

Provision coverage ratio of the bank also increased by 611 bps to 90.86 percent in the reporting quarter.

The total provisions of the bank in first quarter of the current financial year rose marginally by 1.38 percent on-year to Rs 3,943 crore.

Advances & Deposit

The global and domestic advances of the state-owned lender increased 12.33 percent and 11.77 percent on-year, respectively in June quarter.

According to the press release, global advances stood at Rs 8.19 lakh crore and domestic advances stood at 7.94 lakh crore in April-June.

Deposits rose 13.63 percent 0n-year to Rs 11.28 lakh crore.

However, retail term deposit less than Rs 2 crore fell 0.58 percent on-year to Rs 4.36 lakh crore. On sequential basis, it fell 0.43 percent.

Financial inclusion schemes

During the quarter ending June 30, Union Bank of India done new enrollment of 4.63 lakhs Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY).

Similarly, accounts opened by banks under Pradhan Mantri Jan Dhan Yojana (PMJDY) increased 14.06 percent on-year to 2.84 Crores accounts under the Scheme with balance of Rs. 9,002 crore during the quarter ending June 30.

In the corresponding quarter last year, the figure was 2.49 crores account with balance of Rs 7,827 crore.

Under Union Nari Shakti Scheme for Women Entrepreneurs, the bank sanctioned 6,538 applications for Rs 617 crore during Q1 FY24.

In the reporting quarter, the bank sanctioned Rs 10,939 crore towards renewable energy sector and Rs 260 crore towards Union Green Mills.

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Bank of Maharashtra(BoM) Q1 Results: Net profit surges 95%, maintains healthy asset quality

 

Public sector lender Bank of Maharashtra on July 19 reported a 95 percent jump in net profit at Rs 882 crore for the April-June FY24 quarter, compared to Rs 451 crore in the corresponding quarter last year.

Net interest income (NII) of the bank stood at Rs 2340 crores, compared to Rs 1686 crores last year. The bank recorded steady improvement in its net interest margin (NIM). For the April-June FY24 quarter, the lender's NIM stood at 3.86 percent, compared to 3.28 percent last year.

The bank's gross non-performing asset (NPA) stood at 2.28 percent, down from 3.74 percent recorded in the same quarter last year. For the June quarter, total GNPA stood at Rs 4006 crores compared Rs 5259 crores a year ago. On the other hand, net NPA of the lender for the quarter stood at 0.24 percent, improving from 0.88 percent on a year-on-year basis. The lender's total NNPA stood at Rs 413 crores, compared to 1206 crores in the corresponding period last year.

On deposits front, the bank recorded a 25 percent growth taking the total deposits to Rs 2.44 lakh crores from Rs 1.96 lakh crores in the previous year. Current account and savings account (CASA) deposits improved to Rs 1.24 lakh crores from Rs 1.09 lakh crores with current account deposits recording 30 percent growth and savings account deposits recording 9 percent growth.

Gross advances of the bank grew by 25 percent on a year-on-year basis and stood at Rs 1.75 lakh crores compared to Rs 1.40 lakh crores in the year ago quarter.

Looking at the bank's segment wise advances growth, retail sector recorded advances of Rs 44, 952 crores compared to Rs 36,117 crores in the April-June FY23 quarter. Advances to agriculture sector stood at Rs 23,637 crores compared to Rs 19,336 crores last year. Micro small and medium enterprises recorded advances of Rs 33,740 crores for the April-June FY24 quarter compared to Rs 26,121 crores in the corresponding period last year.

The revenue for the bank's treasury operations stood at Rs 1169 crores, growing from Rs 938 crores last year.

Corporate and wholesale operations recorded a revenue of Rs 2028 crores in the April-June FY24 quarter compared to Rs 1217 crores in the same period last year.

Whereas the revenue of the lender's retail operations stood at Rs 2174 crores compared to Rs 1557 crores.

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PSU Banks are pillars of economic development, fostering growth, Though in real danger of Privatisation- AIBOC

 

All India Bank Officers' Confederation (AIBOC), the body of bank officers in the country, on Tuesday, said state-run lenders are in "real danger of privatisation" despite playing a crucial role in closing the economic divide in society.

On the occasion of the 55th Bank Nationalisation Day in India on Wednesday, the Guwahati-headquartered body said public sector banks (PSBs) have played an important role in promoting financial inclusion and mobilising savings since the nationalisation of the lenders in 1969.

"Public Sector Banks are in real danger of privatisation. It is an ideological conflict that can be overcome by supporting the alternative ideology that prioritises the welfare of a larger human population," AIBOC general secretary Rupam Roy said.

Since their nationalisation, these PSBs have been channeling funds to vital sectors such as agriculture, small and medium-sized enterprises (SMEs), education, and infrastructure among others, he added.

"They have been the pillars of economic development, fostering growth and providing millions of Indians with access to banking services," the statement said.

AIBOC said as income inequality becomes an urgent issue in society, PSBs play a crucial role in closing the economic divide, ensuring banking access to the underserved segments of society to foster a more equitable economic environment.

"As an appropriate measure to scrutinise the commercial activity of PSBs, the government should consider funding the cost of services rendered by PSBs at market value when it asks them to carry out its social agenda," it added.

Roy in the statement said as the largest shareholder in PSBs, the government is the biggest beneficiary of the dividends paid by the state-run banks out of the profit.

"This is in addition to the corporate taxes and other taxes that all corporations, including PSBs, are required to pay. The per employee customers for SBI is 1,900, whereas for HDFC it is 530 and for Axis Bank it is 325," he added.

Therefore, the norms and benchmarks for these India-specific PSBs must be devised specifically and their performance must be compared and contrasted amongst themselves, the AIBOC official said.

Roy further said the employees of the public sector lenders have played a crucial role in upholding national values and serving citizens with the utmost commitment.

"They have endured a variety of economic cycles, exhibited resiliency, and continued to provide vital banking services uninterrupted even during difficult Covid periods and during calamities," he added.

Roy pointed out that despite their diligent efforts, bank employees face numerous difficulties and the inadequacy of recruitment in PSBs has put a tremendous strain on the existing workforce, depriving them of much-needed leisure and work-life balance.

"In addition, it is of significant concern that pensions for retirees, who have devoted their careers to nation-building, have not been revised and increased on a par with government and RBI employees," he added.

The AIBOC urged policymakers, regulators, and other interested parties to recognise the invaluable contributions of the PSBs and their employees.

"Addressing their legitimate demands and ensuring their well-being is essential to preserving the nationalisation ethos and fortifying our financial sector for a prosperous future," it added. 

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Expected DA for Bank Employees from August 2023

The Dearness allowance to bank employees and dearness relief to bank pensioners is paid under the 11th bipartite settlement between bank unions and IBA (Indian Bank’s Association) signed on 11th November 2020. The settlement is effective from November 1, 2017. The dearness allowance is paid based on the Consumer Price Index (CPI) number published by the Labor Bureau of India.

The Dearness Allowance (DA) for bankers for the period from August 2023 shall be based on CPI(IW) numbers from April 2023 to June 2023. The latest CPI(IW) data with the base year 2016 is as under.

Month            AICPIN/CPI(IW)

April 2023       134.20

May 2023        134.70

June 2023         yet to be declared 

If CPI(IW) remains at the same level during June 2023 as in May 2023, the DA to bank employees shall be payable for 623 DA slabs as against the existing 596 DA slabs i.e. an increase of 27 DA slabs.

Hence, the Expected DA for bank employees from August 2023 is 43.61%. The existing DA rate for the period of May 2023 to July 2023 is 41.72%. Hence there shall be an increase of 1.89% in dearness allowance for the period from August 2023 to October 2023.

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Central Bank of India Q1 results: Net profit jumps

 

Public sector lender Central Bank of India on July 17 reported a net profit of Rs 418.4 crore for the April-June 2023 quarter, a jump from Rs 235 crore in the corresponding period last year.

The bank's gross non-performing asset (GNPA) also improved to 4.95 percent from 8.44 percent last year. The lender's net NPA stood at 1.75 percent, improving from 1.77 percent in the corresponding quarter last year. This is the on back of improvements in asset quality and increase in net interest margins of the bank.

The gross NPA of the bank in absolute terms fell to Rs 10,891 crore by end of June quarter, as against Rs 29,002 crore in the same quarter last year.

The net NPA, in absolute terms, stood at Rs 3,718 crore as on June 30, as compared to Rs 6,785 crore in the previous year.

The provision coverage ratio of the bank stood at 92.23 percent, which saw on improvement of 562 basis points on-year. One basis point is one hundredth of percentage point.

The net interest income (NII) grew by 48.27 percent to Rs 3,176 crore in Q1FY24 as against Rs 2,142 crore for Q1FY23, whereas, the total income (NII plus other Income) improved by 28.74 percent to Rs 8,184 crore from Rs 6,357 crore in the year-ago period.

The return on assets (ROA) improved to 0.43 percent during as against 0.27 percent in Q1FY23, and the return on equity (ROE) also improved to 1.63 percent for Q1FY24 as against 0.98 percent in the corresponding quarter of the last fiscal.

The total BASEL III Capital Adequacy Ratio improved to 14.42 percent in June 2023 as compared to 13.33 percent the same month last year. The Common Equity Tier 1 ratio came in at 12.13 percent in Q1FY24, registering an improvement of 109 bps.

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Non-performing advances of public sector banks at multi-year lows

The non-performing advances (NPAs) of banks are at multi-year lows, supported by substantial write-offs, especially for state-owned banks. 

The overall loan write-offs by public sector banks (PSBs) exceeded Rs 10 trillion during the FY2017-2023 period. 

This followed the banking industry-wide asset quality review the Reserve Bank of India (RBI) initiated in FY16. The closing stock of write-off pool stood at Rs 7.5 trillion at the end of March 2023, up from Rs 6.8 trillion a year ago. 

The recoveries from this pool are expected to continue to contribute significantly to the profita­bility of PSBs even in a scenario of low recoveries.  

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PSBs started cross-selling much later, says Rajnish Kumar

BharatPe chairman Rajnish Kumar on July 7 said that state-owned lenders have started looking at cross-selling much later than the private sector banks.

"Cross-selling was brought by private sector banks. It was only after this that public sector banks started looking at cross-selling,” said Kumar, who was the chairman of State Bank of India before moving to the fintech.

Kumar was speaking at Moneycontrol’s Startup Conclave in Bengaluru, where big names from the industry are brainstorming on what lies ahead for the startup ecosystem amid a challenging global climate.

Adding to this, Kumar said now-a-day there is cross-selling pressure, but earlier bankers used to have a pressure of settling the books every week.

"Pressure is always there is organisation, but nature may change," he said.

Cross-selling is the practice by banks to offer complementary products or services, or additional to their existing customers.

Banks typically cross-sell insurance products of their subsidiaries, and sometimes of other companies, along with loan products. Many times banks insist purchase of policies along with loan products.

Further, he said when it comes to revenue, currently, the regulators and the law leave little scope to get revenue out of payments. Hence, everybody is looking at cross-selling and digital lending as an opportunity.

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4 public sector banks (PSBs) missed their targets for operating profit growth in FY23

Four public sector banks (PSBs) missed their targets for operating profit growth during the last financial year. Additionally, PSBs have performed well in terms of profits and bad loans but have lost market share in both loans and deposits.

According to a presentation by the department of financial services during an interaction between PSU bank chiefs and finance minister Nirmala Sitharaman, Indian Overseas Bank (IOB), Punjab National Bank (PNB), Punjab & Sind Bank (P&SB), and UCO Bank failed to achieve their growth targets for operating profits, sources told.

IOB's operating profit for the year increased marginally to Rs 5,900 crore from Rs 5,800 crore a year ago, representing a 3.1% rise.

IOB's operating profit for the year increased marginally to Rs 5,900 crore from Rs 5,800 crore a year ago, representing a 3.1% rise.

Similarly, PNB's operating profit rose by 8.5% to Rs 22,500 crore, while P&SB experienced a 9% growth to reach Rs 1,500 crore. UCO Bank was the fourth lender with single-digit operating profit growth (9.5%) at Rs 4,300 crore.

Among PSBs, Bank of India achieved the highest growth in operating profit, with a substantial 34.1% increase to Rs 13,400 crore.

According to the data, the market share of PSBs in total advances declined from 66.3% in 2018 to 58.4% in 2023.

This decline was observed across various sectors, including industry, services, agriculture, MSMEs and retail. The sharpest decline was in advances to MSMEs, where the PSBs' share dropped from 69.2% to 44.1%. Likewise, in terms of deposits, PSBs witnessed a decline in their market share from 70.1% to 61.5% during the same period.

The banks that underwent consolidation experienced the most significant drop in credit share during this period.

PNB's share of total credit decreased from 7.4% in 2018 to 6% in 2023. Union Bank's market share decreased from 6.5% to 5.5%, while Canara Bank saw its share decline from 6.7% to 5.8%.

The state-run lenders have also worked out the strategy to ensure that they completely address the concerns that were flagged by RBI governor Shaktikanta Das during a recent meeting with directors.

There will be greater attention on accounting policies to avoid evergreening of loans and artificial boosting of performance, banking sources said.

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Difference Between Private and Government Indian Banks

 

The following characteristics would clarify the distinction between banks in the private and Government (PSU) Banks:

1. The government owns major shares in public sector banks, whereas private stockholders own the shares in private sector banks.
2. 
   
3. 
   
4. Public sector banks own a total chunk of 72.9% of the market share, while private sector banks hold a share of 19.7%. Therefore, public sector banks control most of the Indian banking industry.
5. 
   
6. Public sector banks have a substantially larger customer base than commercial banks.
7. 
   
8. Compared to private banks, public sector banks have much greater transparency regarding their interest rate policy.
9. 
   
10. Deposit interest rates offered by the public sector banks are greater than those in private sector banks.

Both public and private sector banks offer safe banking activities throughout India. However, the public sector banks, which are nationalized banks, are safest in terms of banking in India. 

There are 12 nationalized banks in India, including the State Bank of India, Punjab National Bank, Bank of Baroda, and Bank of India.

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State Bank of India (SBI) Q4 result: Net profit climbs 83%

 

State Bank of India (SBI) on May 18 reported a standalone profit of Rs 16,694.51 crore for the March quarter, up 83.18 percent from Rs 9,113.53 crore in the same quarter of the previous.

India's largest lender's net interest income came in at Rs 40,392.50 crore, rising 29.5 percent from Rs 31,197 crore in the corresponding quarter of the previous year.

State Bank of India was expected to post a 68 percent rise in profit over the last year, according to a Moneycontrol poll of brokerages. Whereas net interest income (NII) was expected to increase 25.8 percent.

The board of the bank recommended a dividend of Rs 11.30 per equity share for FY23. It will be paid on June 14, 2023, the bank said.

The lender said bank’s return on assets (ROA) and return on equity (ROE) for the financial year 2o23 stood at 0.96 percent and 19.43 percent, respectively. ROA at 1.23 percent for the quarter improved by 49 bps YoY.

Domestic net interest margin (NIM) for Q4FY23 increased by 44 basis points YoY to 3.84 percent.

SBI said its Gross NPA ratio was at 2.78 percent down by 119 bps YoY. Net NPA ratio was at 0.67 percent, down by 35 bps YoY. Provision Coverage Ratio (PCR) was at 76.39 percent, improving by 135 bps YoY. Slippage Ratio for FY23 improved by 34 bps YoY and stood at 0.65 percent, while Slippage Ratio for Q4FY23 was at 0.41 percent.

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All these government banks will be in the list of Privatization

 The government is likely to set up a panel of experts to prepare a list of Public Sector Banks (PSBs) that can be privatised, report said, quoting people aware of the developments. The centre is looking for ways to privatise PSBs as they have turned profitable and bigger, and fewer in number after several rounds of consolidation.

Previously, in April 2021, NITI Aayog had recommended the disinvestment of two state-run banks to the disinvestment department. Subsequently, the Central Bank of India and the Indian Overseas Bank were chosen for the purpose. However, no further steps were taken in this direction, the report said.

The report quoted a government official as saying, "A new committee may be set up to identify lenders for privatisation, which include mid- and small-sized banks, and determine the quantum of the stake sale based on their performance, including their bad loan portfolio among other parameters."

The panel is likely to have officials from the Department of Investment and Public Asset Management, the Reserve Bank of India, and the NITI Aayog.

Speaking on the matter, a govt official said that bank privatisation was part of a government strategy. However, now that all public sector banks have turned profitable, a reassessment of the situation is required.

The Nifty PSU Bank Index (an index that tracks the performance of PSU bank shares in the stock market) went up 65.4 per cent in the last year. Compared to this, Nifty50 (an index that tracks the broader Indian stock market) only grew 16 per cent.

The proposed privatisation plan is likely to focus on 12 smaller PSBs which may include the likes of Bank of Maharashtra and UCO Bank. Big PSBs like State Bank of India, Punjab National Bank, and Bank of Baroda are not being considered for privatisation.

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Bank of Baroda(BoB) Q4 Results: Profit zooms 168% YoY

State-run Bank of Baroda on Tuesday reported a standalone net profit of Rs 4,775 crore, up 168% year-on-year (YoY) for the fourth quarter ended March 2023. In the same quarter of last year, it posted a net profit of Rs 1,779 crore.

Its net interest income (NII) for the quarter grew 33.8% at Rs 11,525 crore. Meanwhile, NII registered a growth of 26.8% YoY for FY23 to Rs 41,3

55 crore.

Global NIM stood at 3.53% in Q4FY23, an increase of 45 bps YoY. NIM for FY23 stood at 3.31 % against 3.03% for FY22. Domestic NIM stood at 3.65% in Q4FY23, a rise of 51 bps YoY. NIM for FY23 stood at 3.42% as compared 3.09% for FY22.

The bank reported a strong quarter on the asset quality front with both gross non-performing assets (NPAs) and net NPAs on the downward trend. The gross NPA of the bank fell to 3.79% in the January-March period, compared with 6.61% in the year-ago quarter.

Meanwhile, net NPAs too were at a record low of 0.89% in Q4 FY23 as against 1.72% in Q4 FY22.

"The Bank has recommended a dividend at Rs 5.50 per equity share (Face Value Rs.2/- each fully paid up) for the FY2022-23 subject to declaration/approval at the ensuing 27th Annual General Meeting," Bank of Baroda said in an exchange filing.

The Board of Directors of Bank of Baroda have fixed July 1, 2023 to July 7, 2023 (both days inclusive) as Book Closure dates for the purpose of 27th AGM and dividend payment. Hence, shareholders having shares as on cut-off date i.e. 30th June 2023 shall be eligible for dividend.

Global advances of the Bank increased to Rs 9,69,548 crore, up 18.5% YoY, led by robust retail loan book growth. Meanwhile, domestic advances of the Bank increased to Rs 7,95,560 crore, up 16.3% YoY. International advances grew by 6.3% sequentially in Q4FY23 and stood at Rs 1,73,988 crore.

It's organic retail advances grew by 26.8%, driven by growth in high-focus areas such as Auto Loan (24.4%), Home Loan (19.5%), Personal Loan (101.5%), Mortgage Loan (18.0%), Education Loan (21.8%).

Global deposits of the bank surged by 15.1% YoY to Rs 12,03,688 crore. Domestic deposits increased by 13% YoY to Rs 10,47,375 crore in March 2023.

The bank's operating income grew 34.6% YoY during the Q4 FY23 to Rs 6,823 crore, while operating profit for the March quarter stood at Rs 8,073 crore, up 43.3% YoY.

Return on Assets for FY23 stood at 1.03%, up by 43 bps YoY, while Return on Equity for FY23 increased by 648 bps YoY to 18.34%.

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Indian Overseas Bank(IOB) Q4 profit rises 18%

Indian Overseas Bank has reported 17.12% rise in net profit to Rs 650 cr for the quarter ended march 2023 as against Rs 555 crore for December 2022 quarter.

The year on year net profit of the bank has surged by 22.75% to Rs 2,099 cr from Rs 1,710 crore as reported in the financial year 2021-22 on the back of strong growth in net interest income and improvement in asset quality.

On the asset quality side, the bank has seen decrease in both gross NPA and net NPA. The bank’s gross NPA has gone down to Rs 14,072 cr (7.44%) as on 31.03.2023 from Rs 14,333 crore (8.19%) as reported on 31.03.2022.

Similarly, the net NPA of the bank has decreased to Rs 3,266 cr (1.83%) from Rs 4,000 cr (2.43%) for the above said period.

The provision requirement for NPA has decreased by 26.52% to Rs 2,499 cr as on 31.03.2023 as against Rs 3401 cr reported in the previous year due to improvement in the asset quality.

The credit cost of the bank has reduced to 1.70% as of 31.03.2023 as against 2.35% reported in the last year.

The net interest margin of the bank stood at 3.20% as on the quarter ended March 2023. The return on asset of the bank also increased to 0.83% as on the quarter ended March 2023 as against 0.73% in the previous quarter.

The capital adequacy ratio has improved to 16.10% as of 31.03.2023 as against 15.16% as of 31.12.2022 and as against 13.83% as of 31.03.2022.

The net interest income of the bank has increased by 30.82% to Rs 8,256 crore as of 31.03.2023 from Rs 6,311 crore reported in the previous financial year on the back of strong credit growth. The credit growth of the bank has increased by 21.31% (YoY) to Rs 1,89,009 crore as on March 31, 2023.

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Indian Bank Q4 net profit up 48% as NII rises 29%

 

State run Indian Bank posted a 48 per cent rise in consolidated net profit at Rs 1,520 crore in Q4 FY23, compared to Rs 1,024 crore in the same period in FY22 and helped by a rise in income and improved asset quality.

The Chennai-based lender’s total income during the quarter under review picked up by 25 per cent to Rs 14,416 crore as against Rs 11,556 crore in Q4 FY22. As on March 31, 2023, the company’s gross non-performing assets (NPA) were 5.95 per cent of the gross advances, as compared to 8.47 per cent during the same period in 2022. Similarly, net NPA was seen at 0.90 per cent of gross advances as on March 31, 2023 as compared to 2.27 per cent during the same period in 2021-22.

Net interest income (NII), which is the difference between interest earned and interest expended, was seen at Rs 5,519 crore in Q4 FY23, increasing 29 per cent when compared to Rs 4,271 crore during the same period in FY22.

Indian Bank's board recommended a dividend of Rs 8.60 per equity share (86 per cent of paid up equity capital of the bank) for FY23. The lender reported an earning per share (EPS) of Rs 12.20 for the period compared to Rs 8.22 for the period ended March 31, 2022.

In Q4 FY23, the bank’s return on average assets was seen up at 0.89 per cent from 0.62  per cent in the Q4 of FY22. Its total capital adequacy ratio (CAR) during the quarter remained the same as Q4FY22 at 16.84 per cent.  

During the entire financial year 2022-23, the bank’s net profit increased by 35 per cent to Rs 5,572 crore as against Rs 4,142 crore in 2021-22. Its total income during the year under review was up by 14 per cent to Rs 52,790 crore as against Rs 46,268 crore in 2021-22.

The bank board has also cleared a plan to raise equity capital aggregating up to Rs 4,000 crore through various modes, including follow-on public offer (FPO), rights issue, qualified institutional placement (QIP) or combination in 2023-24.

The board approved raising around Rs 3,000 crore through the issuance of Basel III Compliant AT 1 Perpetual Bond or Tier-2 Bond in one or more tranches during the current or subsequent financial years based on requirement.

The bank’s cost-to-income ratio improved to 46.47 per cent in March 2023 from 53.03 per cent in March 2022. Its domestic NIM improved to 3.59 per cent during the period from 2.87 per cent last year, advances too increased by 14 per cent YoY to Rs 4,73,586 crore in March 2023 from Rs 4,15,625 crore in March 2022.

RAM (Retail, Agriculture and MSME) advances grew by 12 per cent YoY to Rs 2,72,679 crore from Rs 242,700 crore last year. RAM contribution to gross domestic advances was 61 per cent with retail, agri and MSME advances growing by 13 per cent, 16 per cent and 7 per cent YoY respectively.

Home Loan (Including mortgage) grew by 11 per cent YoY, auto loan by 28 per cent and Personal Loan by 46 per cent during the period. The bank’s deposits increased by 5 per cent YoY and reached Rs 621,166 crore in March 2023. Its CASA ratio stood at 42 per cent. 

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