Public Sector Banks Achieve Record 31.3% Increase in Net Profit From April to December

Synopsis

Public sector banks have reported a remarkable 31.3% increase in net profit for the April-December period of the 2024-25 financial year, resulting in an all-time high aggregate profit of Rs. 1,29,426 crore, as detailed by the Finance Ministry.

Key Takeaways

31.3% increase in net profit year-on-year.
Aggregate net profit reached Rs. 1,29,426 crore.
Improved asset quality with 0.59% Net NPA ratio.
Business growth of 11% year-on-year.
Robust credit growth of 12.4%.

New Delhi, Feb 6 (NationPress) Public sector banks have exhibited a remarkable enhancement in vital financial metrics during the initial three quarters (April-December) of the ongoing financial year (2024-25), achieving an unprecedented net profit increase of 31.3 percent year-on-year, culminating in a record aggregate net profit of Rs. 1,29,426 crore, as reported by the Finance Ministry on Thursday.

The public sector banks have generated a total operating profit of Rs 2,20,243 crore in the first nine months of this financial year. Additionally, the asset quality has improved significantly, with a low Net NPA (non-performing assets) ratio to total loans at 0.59 percent. The aggregate net NPA outstanding has decreased to Rs. 61,252 crore during this period, according to the statement.

These banks have also achieved an overall business growth of 11 percent year-on-year, with aggregate deposit growth reaching 9.8 percent while the total business volume has surged to Rs. 242.27 lakh crore, as highlighted in the statement.

Government-owned banks have recorded a solid credit growth of 12.4 percent, driven by retail credit growth of 16.6 percent, agriculture credit growth of 12.9 percent, and MSME credit growth of 12.5 percent. This has significantly contributed to enhancing the economic growth rate and generating more employment opportunities across the country.

Public sector banks have also established sufficient capital buffers, boasting an aggregate capital-to-risk-weighted assets ratio of 14.83 percent, which is well above the minimum requirement of 11.5 percent and indicative of their strong financial health, according to the statement.

These banks are sufficiently capitalized and well-prepared to fulfill credit requirements across all sectors of the economy, particularly focusing on agriculture, MSME, and the infrastructure sectors that are vital for growth and job creation.

Reforms in policies and processes have led to improved systems and practices concerning credit discipline, recognition and resolution of stressed assets, responsible lending, enhanced governance, financial inclusion initiatives, and technology adoption. These actions have fostered sustained financial stability and robustness within the banking sector, as reflected in the current performance of public sector banks, the statement concluded.