Public sector banks' total profit crosses Rs 1.4 lakh crore in FY24

New Delhi: Public sector banks' cumulative profit crossed Rs 1.4 lakh crore in the financial year ended March 2024, recording a growth of 35 per cent over the previous year on a high base of Rs 1 lakh crore.

The 12 Public Sector Banks (PSBs) together had earned a net profit of Rs 1,04,649 crore in 2022-23.

Out of the total profit of Rs 141,203 crore earned during the FY24, market leader State Bank of India (SBI) alone contributed over 40 per cent of the total earnings, as per the published numbers on exchanges.

SBI earned a profit of Rs 61,077 crore, 22 per cent higher than the previous financial year (Rs 50,232 crore).

In percentage terms, Delhi-based Punjab National Bank had the highest net profit growth with 228 per cent to Rs 8,245 crore, followed by Union Bank of India with a 62 per cent rise to Rs 13,649 crore and Central Bank of India with a 61 per cent increase to Rs 2,549 crore.

Among the banks which recorded over 50 per cent jump in net profit included Bank of India with a 57 per cent growth to Rs 6,318 crore while Bank of Maharashtra with a 56 per cent rise to Rs 4,055 crore, and Chennai-based India Bank recorded a 53 per cent improvement to Rs 8,063 crore.

During the year, the only public sector bank out of 12 reported drop in profit was Punjab & Sind Bank.

Punjab & Sind Bank, headquartered in Delhi, reported a 55 per cent decline in annual net profit, dropping from Rs 1,313 crore in 2022-23 to Rs 595 crore in the fiscal year ending March 2024. The PSBs which reported an annual profit in excess of Rs 10,000 crore are Bank of Baroda (Rs 17,788 crore) and Canara Bank (Rs 14,554 crore).

PSB is a turnaround story from record losses of Rs 85,390 FY18 to record profit in FY24.

The doom-to-bloom story of the public sector banking industry can be attributed to the initiatives and spate of reforms undertaken by the government led by Prime Minister Narendra Modi, along with former finance minister Arun Jaitley, his successor Nirmala Sitharaman and financial services secretary Rajiv Kumar and his successors.

The government has implemented a comprehensive 4R strategy: Recognising NPAs transparently, Resolution and recovery, Recapitalising PSBs, and Reforms in the financial ecosystem.

As part of the strategy, the government infused an unprecedented Rs 3,10,997 crore to recapitalise PSBs during the last five financial years— from 2016-17 to 2020-21. The recapitalisation programme provided much-needed support to the PSBs and prevented the possibility of any default on their part.

The reforms undertaken by the government over the last nine years addressed credit discipline, ensured responsible lending and improved governance. Besides, there was the adoption of technology, and amalgamation of banks, and the general confidence of bankers was maintained.