Overall, all the 12 public sector banks reported a profit of around Rs 15,306 crore in the three months ended June, registering an annual growth of 9.2 per cent. However, major public sector lenders – SBI and
– Recorded lower profit in June quarter.
During the April-June period of the previous financial year, state-owned banks reported a total profit of Rs 14,013 crore.
As per the analysis, the gross NPAs reported by BoM and SBI in the first quarter of the current financial year were 3.74 per cent and 3.91 per cent, respectively, of their total advances.
The net NPAs of these banks declined to 0.88 per cent and 1 per cent, respectively, at the end of June.
The gross NPAs of other public sector lenders varied from 6.26 per cent to 14.90 per cent.
In the June quarter,
The Gross NPA of India was 6.26 per cent and for Central Bank of India it was 14.90 per cent, which is still down. prompt corrective action (PCA) outline reserve Bank of India,
The net NPAs of most of the banks were less than 3 per cent of their respective total advances. Only three lenders –
(3.31 per cent), Central (3.93 per cent) and (4.28 per cent) – registered net NPAs of over 3 per cent in the June quarter.
Narendra Solanki, Head of Equity Research at Anand Rathi Shares & Stock Brokers said that there has been a massive reduction in NPAs, resulting in lower provisioning and better profitability.
However, due to rising yields, treasuries also recorded mark-to-market (MTM) losses, which should reduce incrementally once the pace of rate hikes slows and eventually ends, he said.
MTM losses occur when the held financial assets are valued by the market at a price lower than the purchase price.
Solanki said, “In a big way, with the decline in provisioning and improving the quality of books, the space of public sector banks is in a sweet spot to target growth in the coming quarters. The potential for cost plus accumulation is positive.” ,
In order to improve the financial health of public sector banks, the government has implemented a comprehensive 4R strategy – transparently identifying NPAs, recovery and recovery of value from stressed accounts, recapitalization of banks, and reforms in banks and comprehensive financial Ecosystem.
As part of the strategy, the government has invested Rs 3,10,997 crore for recapitalization of banks during the last five financial years from 2016-17 to 2020-21.
Of the total amount, Rs 34,997 crore was received through budgetary allocation and Rs 2,76,000 crore through issuance of recapitalization bonds.
According to official data, scheduled commercial banks recovered Rs 8,60,369 crore through resolution of NPAs in the last eight financial years.
In FY22, the gross NPAs of scheduled commercial banks hit a six-year low of 5.9 per cent.