Public Banks Outshine Privates in Profit Surge

Public sector banks in India have surpassed private sector banks in net profit growth, demonstrating significant resilience and adaptability. A report by the State Bank of India shows a collective 39.3% profit increase for public banks in Q2 FY25, led by Punjab National Bank's 145% rise.

Public sector banks (PSBs) in India have outperformed their private counterparts in net profit growth, according to a recent report by the State Bank of India. The findings reveal that PSBs showcased a significant year-over-year growth in net profit of 39.3% during the second quarter of FY25, outpacing the 7.1% growth of private sector banks, thus highlighting their strong resilience and adaptability in a competitive market.

Punjab National Bank (PNB) spearheaded the growth by reporting a remarkable 145% year-over-year increase in net profit, attributed largely to a decrease in new provisions and contingencies. Other public banks, such as the Central Bank of India, UCO Bank, and Bank of Maharashtra, also reported substantial profit gains of 50.9%, 50%, and 44.2% respectively. In comparison, private banks demonstrated modest profit growth, with Axis Bank leading at 18%, and ICICI Bank following with a 14.5% rise.

Despite being outperformed in profit growth, private banks maintained a stronger Current Account Savings Account (CASA) ratio, with Kotak Mahindra Bank at the forefront with 43.6%, and ICICI Bank at 40.6%. Meanwhile, among PSBs, the Bank of Maharashtra achieved the highest CASA ratio of 49.3%. These results underscore a shift in the banking sector dynamics as PSBs leverage reforms to boost profitability while private banks emphasize growth through robust CASA figures and increased advances.

(With inputs from agencies.)