New Delhi: The government’s efforts to eliminate bad loans, according to Finance Minister Nirmala Sitharaman, are paying off, as the 12 public sector banks reported a 50% increase in combined net profit for the second quarter ended in September, totaling Rs 25,685 crore.
The combined net profit of all public sector banks (PSBs) climbed by 32% to Rs 40,991 crore in the first half of FY23.
The SBI declared its highest-ever profit for the second quarter at Rs 13,265 crore. This was 74% higher than the same quarter last year when compared year over year.
“The continuous efforts of our govt for reducing the NPAs and further strengthening the health of PSBs are now showing tangible results. All 12 PSBs declared net profit of Rs 25,685 cr in Q2FY23 & total Rs 40,991 cr in H1FY23, up by 50% & 31.6%, respectively (y-o-y),” Sitharaman said in a tweet.
She added that Canara Bank’s earnings increased by 89% to Rs 2,525 crore from the second quarter of the previous fiscal.
She added in another tweet that UCO Bank, situated in Kolkata, saw a 145% increase in second-quarter profit to Rs 504 crore, while Bank of Baroda saw a 58.70% increase to Rs 3,312.42 crore.
Punjab National Bank (PNB) and Bank of India, two of the 12 lenders, reported profit decreases ranging from 9 to 63 percent. Higher provisioning for problematic loans has been blamed for these lenders’ deteriorating profits.
PNB said that greater provisioning for bad loans was the primary cause of the fall in net profit. In comparison to Q2FY22, the bank’s provisioning increased to Rs 3,556 crore from Rs 2,693 crore.
Bank of India (BoI), another state-owned lender, reported that overall provisions more than quadrupled to Rs 1,912 crore in the quarter from Rs 894 crore a year earlier. The majority of the provisions were made on state government standard accounts where payments were late, necessitating the need for provisions following a Reserve Bank of India (RBI) inspection.
Ten lenders reported profits in the second quarter of FY23 that ranged from 13 to 145%. UCO Bank and Bank of Maharashtra saw the biggest percentage rise over the same quarter of the prior fiscal, at 145% and 103%, respectively.