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Performance of PSU Banks in 2003: A Report

As per a report compiled by ICRA, the combined net profits of the 27 PSU banks increased by 48 per cent to Rs 12,294 crore in the last fiscal.Net NPAs fell drastically from 5.8 to 4.5 per cent.The capital base of PSU banks increased to Rs 14,175 crore by the end of last fiscal, from Rs 3,034 crore in 1990-91, with all the banks meeting the RBI stipulated 9.0 per cent capital adequacy ratio by March 31, 2003.

As per a report compiled by ICRA, the combined net profits of the 27 PSU banks increased by 48 per cent to Rs 12,294 crore in the last fiscal. The net profits had increased 92.5 per cent in 2001-02. Thus, the net profit of PSU banks increased 2.8 times during the last two financial years. Of the total State Bank of India and its associates contributed Rs 4,510 crore or 36.7 per cent of the pie, while the share of 19 nationalised banks was at 73.3 per cent at Rs 7,784 crore.

SBI topped the list posting a net profit of Rs 3,105 crore. SBI was followed by Canara Bank with a net profit of Rs 1,019 crore, Bank of India (Rs 851 crore), Punjab National Bank (Rs 842 crore) and Bank of Baroda (Rs 773 crore), the report compiled by ICRA Information, Grading & Research Service said.

Net NPAs fell drastically from 5.8 to 4.5 per cent. Gross NPAs came down to less than 10 per cent from 11.1 per cent. The PSU banks were able to reduce their Gross NPAs to 9.2 per cent at about Rs 54,134 crore while Net NPAs came down to 4.5 per cent Rs 24,974 crore.

Three of the eight SBI and Associate banks had a net NPA exceeding 10 per cent in 1996-97 but the number reduced to NIL in 2002-03. The number of PSU banks having NPAs in excess of 10 per cent also declined from seven at the end of 1996-97 to three at the end of last fiscal.

For PSU banks, gross NPAs under priority sector accounted for 44.5 per cent of their entire gross NPAs. In 10 out of 27 PSU banks, priority sector NPAs constituted more than 50 per cent of their gross NPAs.ICRA feel that the securitisation laws and the proposed Credit Information Bureau is expected to help banks in bringing down their NPAs further.

The capital base of PSU banks increased to Rs 14,175 crore by the end of last fiscal, from Rs 3,034 crore in 1990-91, with all the banks meeting the RBI stipulated 9.0 per cent capital adequacy ratio by March 31, 2003. The main reason for improvement in CAR was the Rs 22,500 crore recapitalisation in 19 PSU banks during the last decade.In 2002-03, Canara Bank, PNB, Union Bank and Allahabad Bank raised nearly Rs 937 crore.

As per ICRA report, the combined income of the PSU banks inched up 9.6 per cent to Rs 1,28,464 crore last fiscal. The trend in declining interest rates in the economy resulted in a mere 1.0 per cent increase in Interest Expenses to Rs 69,853 crore. NPAs and taxes resulted in a 30.3 per cent rise in provisions to Rs 17,420 crore.


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