Public sector banks’ total profit crosses ₹1 lakh-cr mark in FY23
Cumulative profits of public sector banks crossed the ₹ 1 lakh-crore mark in the financial year ended March 2023, with the market-leading State Bank of India (SBI) accounting for nearly half of the total profits.
From recording a total net loss of Rs.85,390 crore in 2017-18, Public Sector Banks (PSBs) have come a long way as their profits touched Rs.1,04,649 crore in 2022-23, according to an analysis of their financial results.
These 12 PSBs have seen a 57 per cent increase in gross profits as compared to the Rs.66,539.98 crore achieved in 2021-22.
In percentage terms, Pune-based Bank of Maharashtra (BoM) had the highest growth in net profit with 126 per cent growth to Rs 2,602 crore, followed by UCO with a 100 per cent rise to Rs 1,862 crore and Bank of Baroda with 94 per cent growth. per cent increasing to ₹1,862 crore to ₹14,110 crore.
However, in absolute range, the SBI reported an annual profit of Rs. 50,232 crore in 2022-23, showing an increase of 59 per cent over the previous financial year.
With the exception of the Punjab National Bank (PNB), other public service bodies have reported impressive annual increases in their after-tax earnings.
PNB in Delhi recorded a 27 per cent drop in annual net profit from ₹3,457 crore in 2021-22 to ₹2,507 crore in the year ending March 2023.
The PSBs reporting annual profit of more than Rs. 10,000 crore are Bank of Baroda (Rs. 14,110 crore) and Canara Bank (Rs. 10,604 crore).
Other lenders such as Punjab and Sind Bank recorded year-on-year profit growth of 26 per cent (Rs. 1,313 crores), Central Bank of India 51 per cent (Rs. 1,582 crores), Overseas Bank of India 23 per cent (Rs. 2,099 crores). ), Bank of India 18 percent (Rs. 4,023 crores), Bank of India 34 percent (Rs. 5,282 crores) and Union Bank of India 61 percent (Rs. 8,433 crores).
PSB is a story of transformation from record losses to record profits. The story of the banking sector’s apocalypse can be attributed to the initiatives and series of reforms implemented by the government led by Prime Minister Narendra Modi, along with former Finance Minister Arun Jaitley and Financial Services Minister Rajiv Kumar and his followers. .
4R strategy
The government implemented a comprehensive 4R strategy: transparent recognition of NAPs, resolution and recovery, recapitalization of technical support bodies, and reforms in the financial ecosystem.
As part of the strategy, the government has injected an unprecedented ₹3,10,997 crore to recapitalize PSBs over the past five financial years – from 2016-17 to 2020-21.
The recapitalization program provided much-needed support to PSB and prevented the possibility of any default on their part.
Reforms undertaken by the government over the past eight years have addressed credit discipline, ensured responsible lending and improved management.
Besides, there has been adoption of technology, bank consolidation, and the general confidence of bankers has been maintained.
In the last quarter of March or the fourth quarter of 2022-23, PSBs earnings cumulatively increased by more than 95 per cent to ₹34,483 crore. In last year’s period, it was the same at ₹17,666 crore.
Analysts said higher interest income and better management of non-performing assets or bad loans were among the main reasons for banks’ improved profitability.