Public sector banks have shown strong financial performance in Q2 FY25, outpacing private banks in net profit growth, according to a latest report by State Bank of India.
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Factors that have driven this growth include improved asset quality, lower provisioning costs, and higher interest income, the note said.
The SBI report also highlighted that the combined net profits of PSU banks has exceeded that of their private counterparts by a notable margin. This, the note said, reflects resilience and strategic improvements made by PSBs, contributing to a positive shift in market sentiment and investor confidence.
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The report said PSU banks collectively achieved 39.3% pn year profit growth while private banks’ profit growth rose only by 7.1% on year.
A recent Moneycontrol analysis of 35 banks too echoed a similar trend, with PAT growth of the state-owned banks in the range of 23-51 per cent in the July-September quarter, while private banks in the range of 4-40 per cent.
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Leaders of the Pack
PNB clocked a 2.5x YoY profit growth due to lower fresh provisions, accompanied by Central Bank, UCO Bank, and Bank of Maharashtra.
In contrast, only Axis Bank and ICICI Bank clocked significantly higher PAT growth on year, rising by 18% and 14.5% respectively. IndusInd Bank in fact noted a decline in profit by 39.6%.
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However, private banks maintained stronger CASA ratio, led by Kotak Bank at 43.6%, closely followed by ICICI Bank ay 40.6%.
The note said PSU banks have leveraged reforms and government support to boost profit and customer reach.
