Public sector banks in India outperform private sector banks: Banknet's review of third quarter results of 41 banks

Indian banking sector stole the limelight with a stellar performance by the public sector as well as the private sector banks. At a time when corporate India has seen its net profits shrink by 24 per cent, banks have reported a 43.83 per cent net profit growth in the quarter ended December 2008. State Bank of India, Punjab National Bank, ICICI and HDFC reported 40 per cent plus growth in the net profits, largely on account of higher-than-estimated treasury gain, higher net interest income, and lower loan loss provisioning.

Banknet's review of third quarter results of 41 banks, shows that PSU banks had outperformed their private sector peers. PSU banks recorded a combined net profit of Rs 10,810 crore in the December 2008 quarter compared with Rs 7,212 crore in the corresponding quarter last year. Private-sector banks posted a net profit of Rs 3,185 crore compared with Rs 2,519 crore during the same period.

The country's largest lender SBI had reported a net profit of Rs 3,713.66 crore, an increase of 52 per cent against Rs 2,442.32 crore of the third quarter of last fiscal, despite challenging market conditions and provisioning. However, the largest private lender ICICI Bank reported a net profit of Rs 1,272.15 crore, a modest growth of 3.41 per cent compared to Rs 1,230.21 crore in the third quarter of 2008 fiscal.

With a robust rise in their net interest income (NII) during the quarter, public sector banks -- Punjab National Bank, Bank of Baroda, Union Bank of India, Corporation Bank and Bank of India -- have been quite aggressive in growth of advances.

Six banks — Lakshmi Vilas Bank, State Bank of Patiala, State Bank of Travancore, Dhanalakshmi Bank, State Bank of Mysore and UCO Bank — have reported more than double net profits. Only one bank - Development Credit Bank (DCB), have reported a net loss of Rs 3.22 crore in the December quarter against a net profit of Rs 25.71 crore in the corresponding quarter a year ago.

Among the top three large banks with highest increase in net profit, Union Bank of India registered a rise of 84.03 per cent in its bottom line. Bank of India followed second with its net profit rising by 70.38 per cent while Axis Bank recorded an increase of 63.24 per cent.

In the medium size category, the State Bank group’s State Bank of Travancore and State Bank of Mysore recorded an increase of 214.96 per cent and 157.51 per cent respectively followed by the federal bank with a rise of 98.11 per cent in its bottom line.

The top three small size banks with maximum increase in net profit included IndusInd Bank with a rise of 80.03 per cent followed by South Indian Bank with 33.10 per cent and Karnataka Bank with 29.31 per cent.








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