The banking sector is likely to post good numbers in the fourth quarter ending March 2023, and the net profit of public sector banks (PSBs) is expected to touch a record high of Rs 1 lakh crore in FY23, which is expected to decline in bad loans. due to decline. and healthy loan growth.
The country’s largest lender State Bank of India (SBI) is expected to post a profit of over Rs 40,000 crore in the financial year ending March 2023, according to a senior bank official. In the first nine months of the last financial year, the bank’s bottom line remained stable. at Rs 33,538 crore, over Rs 31,675.98 crore recorded in FY22.
Similarly, other public sector lenders are also likely to report encouraging numbers, helped by declining non-performing assets (NPAs), reduction in slippages, double-digit loan growth and rising interest rates.
For the first nine months of 2022-23, all the 12 PSBs have posted a cumulative profit of Rs 70,166 crore as compared to Rs 48,983 crore in the year-ago period, a growth of 43 per cent.
“The trend will continue in the fourth quarter. It is very likely that PSBs will earn around Rs 30,000 crore in the fourth quarter and thus close the financial year 2022-23 with a profit of Rs 1 lakh crore,” Punjab & Sind Bank managing director Swaroop Kumar Saha told PTI.
PSBs had posted a cumulative profit of around Rs 15,306 crore in the first quarter, which rose to Rs 25,685 crore in the September quarter and Rs 29,175 crore in the three months to December. All public sector banks, except Punjab National Bank (PNB), reported an increase in net profit in the December quarter.
PNB’s net profit declined 44 per cent to Rs 628 crore in the third quarter due to higher provisioning. SBI registered the highest ever net profit of Rs 14,205 crore with a growth of 68 per cent.
However, Saha said, there will be pressure on the net interest margin of all banks due to rising deposit rates and decline in current accounts and savings accounts (CASA).
He said that most of the banks have registered good credit growth in the fourth quarter despite rising interest rates.
For PSBs, brokerage firm MK Global Financial Services Ltd in its research report said that provisioning is likely to be lower on a quarter-on-quarter basis, given that the bulk of the PCR (provisioning coverage ratio) is likely to be substantially The trend is likely to come down.
However, it said, the recent formulation of specific provisions on large conglomerates by the RBI would require some additional provisions for corporate-heavy large banks. That said, these big banks can dip into contingency buffers to offset these specific provisions.
“Overall, we expect ICICI Bank to report strong profitability among large banks, while Axis Bank is expected to sink into losses due to write-off of goodwill on portfolio acquisition of Citibank. IndusInd Bank should also report healthy profitability on the back of better growth and lower provisions.”
Despite some margin cool-off, it said, Federal is also expected to report healthy profitability, while RBL is expected to report better profitability (1 per cent ROA) in Q3 vs.
Private banks increased their profit by 33 per cent to Rs 36,512 crore in the third quarter from Rs 27,370 crore in the previous year. Barring Bandhan Bank and Yes Bank, all private lenders also reported a rise in net profit in the third quarter. HDFC Bank’s net profit of Rs 12,259 crore is 45 per cent of the profit of private banks.
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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)