Public Sector Banks (PSBs) have doubled their net profit during the financial year 2021-22. The combined profit of 12 state-owned banks stood at Rs 66,539 crore during the financial year 2021-22, a 110 per cent increase from Rs 31,816 crore in the financial year 2020-21.
All 12 state-owned banks reported net profit for the first time in many years. This was also a sharp change from FY18 when only two out of 21 PSBs reported profit. In FY21, only two PSBs reported losses (Central Bank and Punjab & Sind Bank), which dragged down the collective net profit.
Profitability has improved on the back of the completion of clean-up of bad loans and economies of scale after the amalgamation of 10 state-owned banks. The easy liquidity provided by the Reserve Bank of India (RBI) and growth segments like retail loans is some of the other reasons.
SBI net profit highest among all PSBs
SBI’s net profit was the highest at Rs 31,675 crore, which is 55 per cent higher than the previous year. The country’s largest bank accounts for 47 per cent of the total profits of public sector banks. After SBI, Bank of Baroda, with a net profit of Rs 7,272 crore, earned 10 per cent of PSBs’ profits, followed by Canara Bank, which stood at Rs 5,678 crore, which was 8 per cent of total net profit.
Highest revenue growth reported by Bank of Baroda
Besides the two banks that turned around during the year, the highest revenue growth was reported by Bank of Baroda, followed by UCO Bank. Higher profits have enabled PSBs to contribute more to the dividend, which will help the government, which has worked with lower receipts through dividends from RBI. The collective dividend of public sector banks is more than Rs 8,000 crore.
Private banks registered net profit of over Rs 91,000 crore
Private banks registered a net profit of over Rs 91,000 crore, up 29 per cent from Rs 70,435 crore in the previous year. Private banks were led by HDFC Bank (Rs 36,961 crore), ICICI Bank (Rs 23,339 crore), Axis Bank (Rs 13,025 crore), Kotak Mahindra Bank (Rs 8,572 crore), IndusInd Bank (Rs 4,611 crore) and Federal Bank. 1889 crores).
Bank of Maharashtra recorded less than 1 per cent NPA
According to the analysis of key financial parameters of PSBs conducted by bank unions, the Bank of Maharashtra has shown the highest improvement in deposits and advances and is the only PSB to have a net non-performing asset (NPA) of less than 1 per cent. It has also recorded the highest growth in advances of 25 per cent, driven by the retail segment, which rose by 23 per cent.
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