{"id":1281820,"date":"2024-05-21T07:36:33","date_gmt":"2024-05-21T02:06:33","guid":{"rendered":"https:\/\/trak.in\/stories\/?p=1281820"},"modified":"2024-05-21T07:36:54","modified_gmt":"2024-05-21T02:06:54","slug":"with-record-rs-3-lakh-crore-profits-banking-sector-beats-it-in-net-profits","status":"publish","type":"post","link":"https:\/\/trak.in\/stories\/with-record-rs-3-lakh-crore-profits-banking-sector-beats-it-in-net-profits\/","title":{"rendered":"With Record Rs 3 Lakh Crore Profits, Banking Sector Beats IT In Net Profits"},"content":{"rendered":"\n

India’s banking sector has reached an unprecedented milestone in FY24, with its net profit surpassing Rs 3 lakh crore<\/a> for the first time. This significant achievement reflects the robust performance and strategic improvements made by both public and private sector banks. Here’s a closer look at the factors contributing to this historic profit surge and its implications for the banking industry.<\/p>\n\n\n\n

\"With<\/figure>\n\n\n\n

Record-Breaking Profits<\/h4>\n\n\n\n

In FY24, the combined net profit of listed public and private sector banks soared by 39%, reaching Rs 3.1 lakh crore compared to Rs 2.2 lakh crore in FY23. This surge in profits is noteworthy, as it surpasses the cumulative quarterly profits of all listed companies during the initial three quarters of the fiscal year. Notably, the banking sector’s profits outstripped those of the traditionally profitable IT services sector, which recorded a net profit of Rs 1.1 lakh crore in FY24.<\/p>\n\n\n\n

Public vs. Private Sector Banks<\/h4>\n\n\n\n

Both public and private sector banks contributed significantly to this profit milestone. Public sector banks (PSBs) achieved a record net profit of Rs 1.4 lakh crore, marking a 34% increase from the previous year. On the other hand, private sector banks saw their net profit rise by 42%, reaching nearly Rs 1.7 lakh crore, up from Rs 1.2 lakh crore a year ago. This growth highlights the expanding gap in earnings between the two sectors, with private banks maintaining a stronger profit trajectory.<\/p>\n\n\n\n

Turnaround Story for Public Sector Banks<\/h4>\n\n\n\n

Public sector banks have undergone a remarkable turnaround in recent years. From recording record losses of Rs 85,390 crore in FY18, PSBs have achieved record profits in FY24. The net profit of public sector banks has multiplied more than fourfold over the past three years, driven by improved balance sheets and enhanced earnings.<\/p>\n\n\n\n

Several factors have contributed to this turnaround. For instance, the government’s comprehensive 4R strategy\u2014Recognising NPAs transparently, Resolution and recovery, Recapitalising PSBs, and Reforms in the financial ecosystem\u2014has played a pivotal role. This strategy has facilitated the recovery and revitalization of PSBs, enabling them to improve their financial health and profitability.<\/p>\n\n\n\n

Challenges and Provisions<\/h4>\n\n\n\n

Despite the overall positive performance, certain public sector banks faced challenges. Banks like Bank of Baroda incurred losses due to provisions made for their exposure to Go Air, although the loan was backed by collateral. Additionally, several banks had to allocate a one-time provision for pensions, which, although lower than anticipated, impacted their profits.<\/p>\n\n\n\n

Significant Growth Across Banks<\/h4>\n\n\n\n

Among the notable performers, Bank of India recorded a 57% growth in net profit to Rs 6,318 crore, while Bank of Maharashtra saw a 56% rise to Rs 4,055 crore. Chennai-based Indian Bank reported a 53% improvement in net profit, reaching Rs 8,063 crore. These figures underscore the broad-based improvement in the financial performance of public sector banks.<\/p>\n","protected":false},"excerpt":{"rendered":"

India’s banking sector has reached an unprecedented milestone in FY24, with its net profit surpassing Rs 3 lakh crore for the first time. This significant achievement reflects the robust performance and strategic improvements made by both public and private sector banks. Here’s a closer look at the factors contributing to this historic profit surge and […]<\/p>\n","protected":false},"author":30,"featured_media":1281828,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[188,4972],"class_list":["post-1281820","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-banking","tag-it"],"acf":[],"yoast_head":"\nWith Record Rs 3 Lakh Crore Profits, Banking Sector Beats IT In Net Profits - Trak.in - Indian Business of Tech, Mobile & Startups<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/trak.in\/stories\/with-record-rs-3-lakh-crore-profits-banking-sector-beats-it-in-net-profits\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"With Record Rs 3 Lakh Crore Profits, Banking Sector Beats IT In Net Profits - Trak.in - Indian Business of Tech, Mobile & Startups\" \/>\n<meta property=\"og:description\" content=\"India’s banking sector has reached an unprecedented milestone in FY24, with its net profit surpassing Rs 3 lakh crore for the first time. 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