NSE: Public Sector Banks Post Decent Q1 Performance Amid Reforms

Kolaba, August 15, 2023 - India's public sector banks (PSBs) have shown a promising recovery in the first half of FY 2024-25, with their aggregate business exhibits an 11% year-on-year growth. This positive trend follows the implementation of crucial reforms by the government, including the Enhance Access and Service Excellence (EASE) reforms and the establishment of the National Asset Reconstruction Company Ltd.

A statement from the Ministry of Finance revealed that PSBs' global credit porifolio grew by 12.9% in the first half of FY25 to reach ₹102.29 lakh crore, while their deposits rose by 9.5% YoY, totaling ₹133.75 lakh crore.

Their operating profit for the period increased by 14.4% YoY to ₹1,50,023 crore and net profit skyrocketed by 25.6% YoY to ₹85,520 crore. Additionally, PSBs' Asset Quality improved significantly with a decline in Gross Non-Performing Assets (NPA) ratio by 108 basis points from 3.42% to 3.12%, while the Net NPA ratio lowered by 34 bps to 0.63%.

Moreover, the Capital to Risk Weighted Assets (CRAR) ratio remains at an impressive 15.43%, surpassing the regulatory requirement of 11.5%.

PSBs are further investing in adopting cutting-edge technologies such as AI, cloud computing, and blockchain while bolstering their digital infrastructure and robust cybersecurity systems for enhanced customer experiences.

"We're excited to see PSBs embracing innovation, improving efficiency, and boosting asset quality," says Ministry of Finance spokesperson, "Their renewed efforts demonstrate confidence in the reforms' effectiveness and willingness to drive meaningful transformative change."