Despite dismal performance by large lenders such as SBI and PNB, all 12 public sector banks in India made a combined profit of around Rs 15,306 crore, representing a 9.2%Â yearly growth.
According to quarterly figures released by public sector lenders, state-owned banks made a total profit of Rs 14,013 crore during the April-June period of the previous fiscal.
Three institutions, State Bank of India (SBI), Punjab National Bank (PNB), and Bank of India, reported profit declines ranging from 7% to 70%.
These lenders’ earnings decline has been ascribed to Mark-to-Market (MTM) losses caused by rising bond yields.
MTM losses arise when the market values the financial assets held at a lower price than the purchase price.
During the first quarter of FY23, nine lenders made profits ranging from 3-117%.
The largest percentage growth was reported by Pune-based Bank of Maharashtra, which earned a profit of Rs 452 crore compared to Rs 208 crore in the previous year’s same quarter.
It was followed by the Bank of Baroda, which increased its bottom line by 79% to Rs 2,168 crore from Rs 1,209 crore the previous year.
Despite a drop in profit, SBI remained the largest contributor to the total earnings of banks, at Rs 6,068 crore.
SBI alone contributed almost 40% of the overall profit. Bank of Baroda came in second with Rs 2,168 crore.
The cumulative earnings of public sector banks will more than quadruple to Rs 66,539 crore in 2021-22, up from Rs 31,816 crore the previous year. Only two public sector banks (Central Bank and Punjab & Sind Bank) declared losses in FY21, dragging down the overall net profit.
Following a break, many state-owned banks distributed dividends in the past fiscal year. In total, nine banks, including SBI, announced dividends to shareholders totaling Rs 7,867 crore.
From 2015-16 to 2019-20, there were five consecutive years of collective losses.
The greatest net loss was Rs 85,370 crore in 2017-18, followed by Rs 66,636 crore in 2018-19, Rs 25,941 crore in 2019-20, Rs 17,993 crore in 2015-16, and Rs 11,389 crore in 2016-17.
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