"Public Banks' Profits Surge, Exceed Rs 1.4 Trillion"

In the fiscal year 2024, the combined profits of public sector banks experience a substantial 35% increase, reaching over Rs 1.4 trillion, showcasing significant growth and financial strength in the sector.

During FY24, State Bank of India (SBI), as the market leader, accounted for more than 40% of the total earnings, amounting to Rs 141,203 crore.

In the financial year ending March 2024, the cumulative profit of public sector banks exceeded Rs 1.4 trillion, marking a 35% growth from the previous year's high base of Rs 1 trillion. In 2022-23, the 12 Public Sector Banks (PSBs) collectively earned a net profit of Rs 1,04,649 crore.

According to published data on exchanges, the total profit earned during FY24 amounted to Rs 141,203 crore. State Bank of India (SBI), the market leader, contributed over 40% of this total earnings. SBI's profit stood at Rs 61,077 crore, marking a 22% increase from the previous financial year's figure of Rs 50,232 crore.

In terms of percentage, Punjab National Bank, based in Delhi, saw the highest net profit growth at 228%, reaching Rs 8,245 crore. Following closely, Union Bank of India recorded a 62% increase to Rs 13,649 crore, and Central Bank of India experienced a 61% rise to Rs 2,549 crore.

Additionally, Bank of India witnessed a 57% growth to Rs 6,318 crore, Bank of Maharashtra saw a 56% rise to Rs 4,055 crore, and India Bank, headquartered in Chennai, marked a 53% improvement to Rs 8,063 crore.

During the fiscal year, Punjab & Sind Bank, the sole public sector bank among the 12, witnessed a decline in profit. Based in Delhi, it reported a 55% decrease in annual net profit, falling from Rs 1,313 crore in 2022-23 to Rs 595 crore in FY24. Notably, Bank of Baroda recorded Rs 17,788 crore, and Canara Bank reported Rs 14,554 crore in annual profit.

This turnaround in the public sector banking industry, shifting from record losses of Rs 85,390 crore in FY18 to record profits in FY24, can be attributed to various initiatives and reforms by the government. Led by Prime Minister Narendra Modi and supported by former finance ministers Arun Jaitley and Nirmala Sitharaman, as well as financial services secretaries like Rajiv Kumar and their successors, these efforts have contributed to this positive transformation.

The government has implemented a comprehensive strategy, known as the 4R strategy, which includes Recognising NPAs transparently, Resolution and recovery, Recapitalising PSBs, and Reforms in the financial ecosystem. Over the last five financial years, from 2016-17 to 2020-21, the government infused an unprecedented Rs 3,10,997 crore to recapitalise PSBs, providing crucial support and averting potential defaults. These efforts, along with reforms addressing credit discipline, responsible lending, improved governance, adoption of technology, and bank amalgamations, have bolstered confidence in the banking sector over the past nine years.

Source: business-standard‍