MUMBAI: Indian commercial banks have reported a combined profit of nearly Rs 60,000 crore for the September quarter, an increase of 59% over the Rs 37,567 crore net in the year-ago period. This is the highest profit recorded by Indian banks in any quarter.
After major banks reported their results on Saturday, the bank Nifty index touched 41,779 on Monday, close to its historic high of 41,840.
Private banks have collectively reported a profit of Rs 33,165 crore, which is around 67% more than Rs 19,868 crore in the previous year. Public sector banks have reported a combined net of Rs 25,685 crore for Q2, up 50% from Rs 17,123 crore in FY22.
More than half of the profit has been generated by SBI, which posted its highest quarterly earnings of Rs 13,256 crore, an increase of 74% over previous year. SBI’s record net has made it the most profitable company this quarter on a consolidated basis. The consolidated net profit of SBI at Rs 14,752 crore was higher than Reliance Industries’ Rs 13,656 crore.
In the private sector, HDFC Bank reported a net profit of Rs 10,605 crore, an increase of 20%. ICICI Bank reported a profit of Rs 7,758 crore (up 37%), Axis Bank Rs 5,330 crore (70% gain) and Kotak Bank Rs 2,581 crore (27% increase). Finance minister Nirmala Sitharaman tweeted the record performance of public sector banks on Monday and attributed it to the “continuous effort of the government for reducing non-performing assets (NPAs)”. The government had been facing flak for record losses by public sector banks in earlier years after they made provisions for bad loans to industrial houses over several quarters from 2016. For public sector banks, the profits for the first half of the current fiscal year was Rs 40,991 crore, an increase of 31% over Rs 31,290 crore in the first half of FY22.
The current quarter’s rise in profit is driven by a surge in credit, which grew nearly 20%, even as banks revised their lending rate in line with RBI’s rate hikes. Banks have managed to improve their margins as cost of deposits have not risen in line with the increase in lending rates.
The road to recovery has been a long one for Indian banks. In the last few years, they had to make provisions for loans worth over Rs 10 lakh crore. The recovery was aided by recapitalisation of banks with the government infusing Rs 3.1 lakh crore over the last five years. Of this capital, Rs 35,000 crore was through budgetary allocation and the remaining Rs 2,75,000 crore was by way of recapitalisation bonds, where banks lend money to the government, which hands it back as equity.
After major banks reported their results on Saturday, the bank Nifty index touched 41,779 on Monday, close to its historic high of 41,840.
Private banks have collectively reported a profit of Rs 33,165 crore, which is around 67% more than Rs 19,868 crore in the previous year. Public sector banks have reported a combined net of Rs 25,685 crore for Q2, up 50% from Rs 17,123 crore in FY22.
More than half of the profit has been generated by SBI, which posted its highest quarterly earnings of Rs 13,256 crore, an increase of 74% over previous year. SBI’s record net has made it the most profitable company this quarter on a consolidated basis. The consolidated net profit of SBI at Rs 14,752 crore was higher than Reliance Industries’ Rs 13,656 crore.
In the private sector, HDFC Bank reported a net profit of Rs 10,605 crore, an increase of 20%. ICICI Bank reported a profit of Rs 7,758 crore (up 37%), Axis Bank Rs 5,330 crore (70% gain) and Kotak Bank Rs 2,581 crore (27% increase). Finance minister Nirmala Sitharaman tweeted the record performance of public sector banks on Monday and attributed it to the “continuous effort of the government for reducing non-performing assets (NPAs)”. The government had been facing flak for record losses by public sector banks in earlier years after they made provisions for bad loans to industrial houses over several quarters from 2016. For public sector banks, the profits for the first half of the current fiscal year was Rs 40,991 crore, an increase of 31% over Rs 31,290 crore in the first half of FY22.
The current quarter’s rise in profit is driven by a surge in credit, which grew nearly 20%, even as banks revised their lending rate in line with RBI’s rate hikes. Banks have managed to improve their margins as cost of deposits have not risen in line with the increase in lending rates.
The road to recovery has been a long one for Indian banks. In the last few years, they had to make provisions for loans worth over Rs 10 lakh crore. The recovery was aided by recapitalisation of banks with the government infusing Rs 3.1 lakh crore over the last five years. Of this capital, Rs 35,000 crore was through budgetary allocation and the remaining Rs 2,75,000 crore was by way of recapitalisation bonds, where banks lend money to the government, which hands it back as equity.
