Public Sector Banks (PSBs) have exhibited remarkable financial performance in the first three quarters (April-December) of FY 2024-25, recording the highest-ever net profit of ₹1.29 lakh crore, marking a 31.3% year-on-year (YoY) growth. This performance is attributed to robust credit growth, improved asset quality, and strong capital buffers, reinforcing the overall financial health of the banking sector.
Key Financial Highlights (As of 31st December 2024)
Record Profitability and Operational Efficiency
- Net Profit Growth: PSBs reported a 31.3% YoY growth, reaching an all-time high net profit of Rs 1,29,426 crore.
- Operating Profit: Aggregate operating profit stood at Rs 2,20,243 crore, reflecting efficient banking operations.
Improved Asset Quality
- Net Non-Performing Asset (NPA) Ratio: Declined to 0.59%, demonstrating enhanced credit discipline.
- Outstanding Net NPAs: Reduced to Rs 61,252 crore, indicating better asset resolution and risk management.
Strong Business and Credit Growth
- Total Aggregate Business: Expanded to Rs 242.27 lakh crore, marking an 11.0% YoY growth.
- Deposit Growth: 9.8% YoY increase, ensuring stable liquidity.
- Credit Growth:
- 12.4% YoY rise, with key sectors leading the expansion:
- Retail Credit: 16.6%
- Agriculture Credit: 12.9%
- MSME Credit: 12.5%
Strengthened Capital Position
- Capital to Risk-Weighted Assets Ratio (CRAR): 14.83%, significantly above the regulatory requirement of 11.5%.
- Adequate capital buffers ensure that PSBs remain resilient and capable of supporting economic growth.
Strategic Focus Areas
- Meeting Credit Demand Across Sectors: PSBs are well-capitalized and prepared to support credit demand in crucial sectors, including
- Agriculture – Boosting rural financing.
- MSME Sector – Enhancing small business growth.
- Infrastructure – Enabling economic expansion.
- Reforms Driving Financial Strength: Policy and process reforms have played a vital role in strengthening PSBs through
- Better Credit Discipline – Ensuring responsible lending practices.
- Enhanced Stressed Asset Recognition & Resolution – Leading to lower NPAs.
- Financial Inclusion Initiatives – Expanding banking access.
- Technology Adoption – Driving efficiency in banking operations.