NSE Gains from Public Sector Banks' Decent Performance

The Ministry of Finance has stated that public sector banks (PSBs) have shown a commendable performance in the first half of FY 2024-25, with their aggregate business exhibiting an 11% year-on-year (YoY) growth.

Following significant reforms launched by the government, PSBs have emerged stronger, according to officials. The implementation of the Enhance Access and Service Excellence (EASE) reforms and the establishment of the National Asset Reconstruction Company Ltd. (NARCL) have had a positive impact on their performances.

In terms of global operations, the credit and deposit portfolios of PSBs grew by 12.9% and 9.5% YoY respectively, reaching ₹102.29 lakh crore and ₹133.75 lakh crore.

Their first-half operating profit for FY25 expanded by 14.4% YoY to ₹1,50,023 crore, while net profit surged by a further 25.6YoY to ₹85,520 crore.

The gross and net Non-Performing Assets (NPA) ratios declined by 108 bps to 3.12%, reflecting a considerable reduction in their asset quality issues. Conversely, the Capital to Risk-Weighted Assets (CRAR) ratio came in at 15.43%, which far exceeded the regulatory requirement of 11.5%.

Additionally, PSBs have begun integrating innovative technologies like AI, cloud computing, and blockchain into their operations, as well as strengthening their digital infrastructure and cybersecurity systems for enhanced customer service.

These remarkable improvements underscore the resilience of public sector banks in India and hint at a more optimistic future outlook for these institutions.