Cumulative profit of public sector banks exceeds Rs 1 trillion for fiscal year ending March 2023
Posted Date – Sunday, 5/21/23 at 10:10pm
Cumulative profit of public sector banks exceeds Rs 1 trillion for fiscal year ending March 2023
New Delhi: Cumulative profits of public sector banks crossed the Rs 1 trillion mark in the financial year ending March 2023, with market leader State Bank of India (SBI) accounting for nearly half of the total.
According to an analysis of the financial performance of public sector banks (PSBs), the public sector banks (PSBs) have come a long way from a total net loss of Rs 8,539 crore in 2017-18 to a profit of Rs 1,046.49 crore in 2022-23.
The aggregate profit of the 12 PSBs has risen by 57 per cent compared to Rs 66,539.98 crore in 2021-22.
In percentage terms, Pune-based Bank of Maharashtra (BoM) posted the highest growth in net profit at 126 per cent to Rs 2,602 crore, followed by UCO at 100 per cent to Rs 1,862 crore, Vadodara Banks rose 94% to 141.1 million.
However, in absolute terms, SBI reported an annual profit of Rs 5,023.2 crore for 2022-23, up 59 percent from the previous financial year.
With the exception of Punjab National Bank (PNB), the PSBs posted impressive year-on-year growth in after-tax profits.
Delhi-headquartered PNB posted a 27 per cent drop in annual net profit to Rs 2,507 crore in the year to March 2023 from Rs 3,457 crore in 2021-22.
The PSBs reporting annual profits above Rs 1,000 crore are Bank of Baroda (Rs 141.1 crore) and Canara Bank (Rs 106.04 crore).
Other banks such as Punjab and Sind Bank posted annual profit growth of 26% (Rs 13.13 crore), RBI 51% (Rs 15.82 crore), Indian Overseas Bank 23% (Rs 20.99 crore) and Indian Bank 18% (Rs 40.23 billion), Bank of India 34% (Rs 52.82 billion) and Union Bank of India 61% (Rs 84.33 billion).
PSB is a turnaround story from record losses to record profits. The public sector banking boom story can be attributed to the initiatives and series of reforms undertaken by the government led by Prime Minister Narendra Modi and former Finance Minister Arun Jaitley and Financial Services Minister Rajiv Kumar and their successors .
The government has implemented a comprehensive 4R strategy: transparent recognition of non-performing assets, resolution and recovery, restructuring of PSBs, and financial ecosystem reform.
As part of this strategy, the government has injected an unprecedented Rs 3,109.97 crore over the past five financial years (from 2016-17 to 2020-21) to recapitalize PSBs. The recapitalization plan provided much-needed support to PSBs and prevented them from defaulting.
Reforms undertaken by the government over the past eight years have addressed credit discipline, ensuring responsible lending and improving governance. In addition, the adoption of technology, the consolidation of banks, and the general confidence of bankers were maintained.
In the latest March quarter, or fourth quarter 2022-23, PSBs’ profits rose by more than 95% cumulatively to Rs 3,448.3 crore. In the same period last year, the figure stood at Rs 176.66 billion.
Higher interest income and improved management of non-performing assets, or bad debts, were key reasons for the bank’s improved profitability, analysts said.
