Profit of public sector banks rises 9% in June qtr(Q1FY23)


All the 12 public sector banks earned a cumulative profit of about Rs 15,504 crore, registering a 9.2 per cent growth annually, despite poor showing by large lenders like SBI and PNB.

During the April-June period of the previous fiscal, state-owned banks recorded a total profit of Rs 14,013 crore, according to quarterly numbers published by public sector lenders.

Of the total 12, three lenders -- State Bank of India (SBI), Punjab National Bank (PNB) and Bank of India -- reported fall in their profits ranging from 7-70 per cent.

Decline in profit by these lenders has been attributed to Mark-to-Market (MTM) losses due to hardening bond yields.

MTM losses occur when the financial assets held are valued by the market at a price lower than the purchase price.

Nine lenders have recorded profit ranging from 3-117 per cent during the first quarter of FY23. The highest percentage growth was recorded by Pune-based Bank of Maharashtra which earned a profit of Rs 452 crore against Rs 208 crore in the same quarter of the previous year.

It was followed by Bank of Baroda which recorded a 79 per cent bottom line growth at Rs 2,168 crore compared to Rs 1,209 crore a year ago.

Despite having witnesased a fall in its profit, SBI remained the highest contributor to the combined profit of banks with Rs 6,068 crore. SBI alone contributed about 40 per cent of the total profit. It was followed by Bank of Baroda with Rs 2,168 crore.

During 2021-22, the collective profit of public sector banks more than doubled to Rs 66,539 crore as against Rs 31,816 crore in the preceding year. In FY21, only two public sector banks (Central Bank and Punjab & Sind Bank) reported losses, which dragged down the collective net profit.

Many state-owned banks after a hiatus also declared dividend in the last financial year. In all, nine banks including SBI declared dividends of Rs 7,867 crore to shareholders.

There were collective losses recorded in the five straight years from 2015-16 to 2019-20.

The highest amount of net loss was registered in 2017-18 at Rs 85,370 crore, 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.

Net Profit of PSBs

State Bank of India(SBI)- Rs. 6068 cr

Bank of Baroda(BoB) - Rs. 2168 cr

Canara Bank - Rs. 2022 cr

Union bank of India - Rs. 1558 cr

Indian Bank- Rs. 1311 cr

Bank of India(BoI) - Rs. 561 cr

Bank of Maharashtra - Rs. 452 cr

Indian Overseas Bank(IOB) - Rs. 392 cr

Punjab National Bank(PNB) - Rs. 308 cr

Central Bank of India - Rs. 235 cr

Uco Bank - Rs. 224 cr

Punjab & Sind Bank - Rs. 205 cr


IOB declares a 20% jump in net profit in Q1

 Indian Overseas Bank (IOB), a public sector lender, announced on Saturday that its net profit for the first quarter of the current fiscal year increased by 20% to Rs.392 crore from Rs.327 crore in the same quarter of the previous year.

According to IOB, its total deposits rose by 7.04 per cent year over year to Rs. 2,60,045 crores as of June 30, 2022, from Rs. 2,42,941 crores in Q1FY22. When compared to the previous year, the bank's overall business expanded by 10.92 per cent YoY to Rs. 4,23,589 crores as of June 30th, 2022, from Rs. 3,81,885 crores in Q1FY22. Gross Advances climbed to Rs. 1,63,544 crores as of June 30, 2022, up from Rs. 1,38,944 crores the previous year, while CASA of the Bank increased to 43.07 per cent, up from 41.63 per cent. Total CASA has climbed to Rs. 1,12,012 crores on June 30, 2022, from Rs. 1,01,129 crores on June 30, 2021. Due to investments that were marked to market for a provision of Rs. 340.16 crore, the bank's operating profit for the quarter that ended on June 30, 2022, fell to Rs. 1026 crore from Rs. 1202 crore in Q1FY22.

The bank's gross non-performing assets (NPA) fell to Rs.14,769 Cr in Q1FY23 from Rs.15,952 Cr in Q1FY22, a reduction of 7.41 per cent YoY. IOB reported a total income of Rs. 5028 crore for the quarter that ended on June 30, 2022, a 2.46 per cent YoY reduction from Rs. 5155 crore for the quarter that ended on June 30, 2021.  IOB recorded a net NPA of Rs. 3,698 Cr. in Q1FY23 vs Rs. 3,998 Cr in Q1FY22, a loss of 7.50% YoY. The bank reported a net interest margin of Rs. 2.53 Cr in Q1FY23 versus Rs. 2.34 Cr. in the same quarter of the previous year.

IOB reported a gross NPA ratio of 9.03% compared to 11.48% in the same quarter of the last year and the bank reported a net NPA ratio of 2.43% compared to 3.15% in the same quarter of the last year. The bank reported a cost-to-income ratio of 56.27% compared to 53.57% in Q1FY22. IOB reported a return on assets (ROA) of 0.52% compared to 0.47% in Q1FY22 and the return on equity (ROE) of the bank comes down to 12.63% in Q1FY23 which was 14.57% in Q1FY22.

Interest income for the bank totalled Rs. 4435 crores for the quarter that ended on June 30, 2022, compared to Rs. 4,063 crores in the same quarter of the last year. Due to a rise in other income, the bank's non-interest income decreased from Rs. 1,092 crore for the quarter ended June 30, 2021 to Rs. 593 crore for the quarter ended June 30, 2022. The bank's total expenditure grew from Rs. 3,953 crores for the quarter ended June 30, 2021, to Rs. 4002 crores for Q1FY23. 

The bank's Gross NPA in the first quarter of FY23 was Rs. 14,769 crores, or 9.03 per cent, compared to Rs. 15,952 crores, or 11.48 per cent, in the first quarter of FY22. In comparison to 91.56% in Q1FY22, IOB's Provision Coverage Ratio increased to 91.86 per cent in Q1FY23.


State Bank of India (SBI) Q1 results: Net profit dips 6.7%

Beating the street estimates by a huge margins, the State Bank of India (SBI) has reported year-on-year (YoY) dip of 6.7 per cent in net profit to Rs.6,068 crore in Q1FY23 against Rs.6.504 core in Q1FY22. India's largest commercial bank has reported rise in its net interest income (NII) from Rs.27,638 crore in Q1FY22 to ₹31,196 crore in Q1FY23, logging near 12.87 per cent rise on YoY basis. SBI shared these q1 earnings while announcing its Q1FY23 results on Saturday.

While announcing the Q1 results for the financial year 2022-23, SBI has reported Operating Profit for Q1FY23 at Rs.12,753 crores as against Rs. 18,975 crores in Q1FY22, impacted by MTM Losses on investment book.

The MTM hit also had an adverse impact on bank’s ROA and ROE, which stand at 0.48 per cent and 10.09 per cent respectively.

On asset quality front, SBI reported Gross NPA ratio down by 141 bps YoY at 3.91 per cent, while Net NPA ratio down by 77 bps YoY at 1.00 per cent. Provision Coverage Ratio (PCR) improved by 719 bps YoY at 75.05 per cent. PCR (Including AUCA) stands at 90.14 per cent.

Slippage Ratio of SBI for Q1FY23 stands at 1.38 per cent, which is 1.09 per cent better in YoY terms. Credit Cost of the public sector bank for Q1FY23 stands at 0.61 per cent, around 18 bps better than its Credit Cost for Q1FY22.

SBI has reported YoY credit growth to the tune of 14.93 per cent. Its Domestic Advances grew at 13.66 per cent YoY and Foreign Offices’ Advances grew by 22.39 per cent YoY.

SBI's Domestic Advances growth is mainly driven by the Retail Personal Advances (18.58 per cent YoY), out of which Home Loan grew by 13.77 per cent YoY. Corporate Loan book of the PSU bank grew by 10.57 per cent. SME and Agri loans have also registered YoY growth of 10.01 per cent and 9.82 per cent respectively.

“Bank’s Balance Sheet size crosses Rs.50 lakh crores," adding, “Capital Adequacy Ratio (CAR) as at the end of Q1FY23 stands at 13.43 per cent," said SBI while announcing its Q1 results on Saturday.


UCO Bank Q1 Results: Profit rises 11% YoY

State-owned Uco Bank managed to report an 11% rise in June quarter net profit at Rs 224 crore against Rs 102 crore in the year ago period on account of sharp fall in provisions while its total income slipped due to treasury losses.

The bank booked a market to market loss of Rs 653 crore leading to negative other income of Rs 55 crore against Rs 857 crore in the year ago period.

In line with this, the operating profit fell 62.5% at Rs 440 crore for the quarter under review against Rs 1173 crore in the corresponding quarter in FY22.

However, a 76% dip in total provisions including those to cover bad loans at Rs 247 crore against Rs 1014 crore helped the lender show a rise in net profit.

Bank managing director Soma Sankara Prasad said the management does not expect more provisioning requirements in the September quarter against treasury operations as bond yields are likely to stay at the current levels or may come down with the Reserve Bank of India frontloading repo rate cuts.

Uco's net interest margin remained at a healthy 3.25% for the quarter.Its asset quality improved with gross non-performing assets ratio standing at 7.42% at the end of June as compared with 7.89% three months prior to that. Net NPA ratio stood at 2.49% against 2.7%.

The bank's capital adequacy ratio remained stable at 4.13%."We are not required to raise capital till March," Prasad said.


Bank of India's Q1 profit declines 22% to Rs 561 cr as provisions rise


Bank of India's net profit declined 22.08 per cent year-on-year (YoY) to Rs 561 crore in the first quarter of financial year 2022-23 (Q1FY23) on fall in non-interest income and rise in provisions for bad loans.

The Mumbai-based public sector lender had posted a net profit of Rs 720 crore during the year-ago period (Q1FY22).

While the bank’s net interest income (NII) was up 29.4 per cent at Rs 4,072 YoY, net interest margin (NIM) improved to 2.55 per cent from 2.16 per cent a year ago, it said in a statement.

Its non-interest income declined sharply to Rs 1,152 crore in Q1FY23 from Rs 2,320 crore in the year-ago period. Its treasury revenues, which have a significant share in non-interest income, were hit due to hardening of bond yields.

The bank’s asset quality profile improved with gross non-performing assets (GNPAs) at 9.3 per cent till June 2022 from 13.5 per cent in the year-ago quarter. Net NPAs dipped to 2.21 per cent in June 2022 from 3.35 per cent a year ago.

NPA provisions rose to Rs 1,304 crore in the first quarter of FY23 from Rs 873 crore in the same quarter a year ago. The provision coverage ratio improved to 87.96 per cent for the quarter under review from 86.17per cent a year ago.

While the bank’s loan portfolio grew 15.2 per cent YoY to Rs 4.77 trillion as of June 2022, the deposits increased 2.78 per cent YoY to Rs 6.4 trillion in June 2022.

The total capital adequacy ratio (CAR) stood at 15.61 per cent in June 2022, up from 15.07 per cent in the same month a year ago.


Punjab & Sind Bank net profit up 17.82%


Punjab & Sind Bank (PSB), a public sector bank, on Monday reported a 17.82 per cent increase in net profit for Q1 ended June 30, 2022 at Rs.205 crore.

However, the latest bottomline performance was 41 per cent lower than the net profit of Rs.346 crore recorded in Q4FY22.

Asked as to why the bank faced sequential decline in profits in Q1FY23, Swarup Kumar Saha, Managing Director & CEO, PSB said the performance for the quarter under review was weighed down by a marked-to-market loss of Rs.109 crore. He highlighted PSB had in Q!FY22 recorded treasury gain of Rs.130 crore.

This is the first quarter (June 2022) that the bank faced overall treasury loss largely due to spike in G-sec yield rates in the system. From April this year onwards, there has been an increase in interest rates, largely resulting from tightening of monetary policy by the RBI.

Despite the bank taking a MTM loss of Rs.109 crore in Q1, Saha expressed confidence that it would be able to this fiscal achieve bottomline of about Rs.1039 crore — the same level as recorded in 2021-22.

Saha said he was giving a somewhat muted profit guidance primarily on account of uncertainty in how interest rates will move in coming days and the MTM impact that it could have on the balance sheet.

“Every bank has had to face impact of MTM loss in the June quarter. This has been across the industry. We too had to face this. We have booked the entire amount (MTM loss) as RBI has not permitted banks to stagger it. As of now, we feel we are adequately cushioned. We feel the impact would not be substantial incrementally from June onwards”, Saha said post the announcement of Q1 results of the bank.

It maybe recalled that PSB had last fiscal staged a turnaround and reported a net profit of Rs.1,039 crore.

On capital raising, Saha said the bank was adequately capitalised for now, but may go in for some capital mop up in Q4FY23.

He said PSB is looking to transfer five non-performing assets (NPA) accounts amounting to Rs.528 crore to the newly set up, National Asset Reconstruction Company Ltd (NARCL).Total income of PSB for Q1FY23 stood at Rs.1915 crore.

Saha said the bank was aiming to bring down the gross NPA, which stood at 11.34 per cent now, to below 10 per cent by end March 2023. Net NPA, which was at 2.56 per cent as of June 2022, would be brought below 2 per cent as of end March 2023, he added. PSB was eyeing retail credit growth of 15 per cent this fiscal.


RBI Floating rate savings bonds 2020: An overview

Government of India has announced to launch Floating Rate Savings Bonds, 2020 (Taxable)(RBI Bond) scheme commencing from July 01, 2020. 

The Floating Rate Savings Bonds 2020 (Taxable), popularly known as the RBI 7.15% Bonds, currently offer a 7.15% taxable rate of interest over a tenure of seven years. They have replaced the Government of India's 7.75% (taxable) bonds - informally called RBI 7.75% bonds. They are called floating-rate bonds as the interest rate on these bonds is reset every six months starting from January 01, 2021 and is always set at a spread of 35 basis points over the prevailing NSC (National Saving Certificate) rate.

Features of Floating Rate Savings Bonds(RBI Bonds)

Eligibility: (i) Resident Individual, and (ii) HUF

Entry age: There is no minimum entry age. In the case of minors, the floating rate bonds can be purchased by parents/legal guardians.

Investments: Minimum : Rs 1,000. Maximum-No limit.

Interest : 7.15% (interest paid at half-yearly intervals on Jan 01 and July 01 every year. There is no option to pay interest on a cumulative basis).

Tenure : Seven years

Account-holding categories: (i) Individual, (ii) Joint, and (iii) Minor through a guardian.

Nomination: Facility is available.

Exit option: There is no exit option from these bonds before maturity, except for senior citizens.

Investment objectives and risks

To provide savers with an assured rate of interest over the medium term. Savers in floating rate bonds are not fully protected from inflation.

Suitability and alternatives

Suitable for conservative investors seeking assured returns from a lump-sum investment.

Not suitable for investors who can assume some risk by investing in equity-linked investments, which can generate much higher returns.

Alternatives can be (i) Balanced mutual funds (for those who can assume risk), (ii) Bank fixed deposits, though the rate of return is lower, and (iii) Company deposits

Capital and inflation protection

Your capital in floating rate bonds is fully protected. However, there is no inflation protection, which means whenever inflation is above the latest interest rate, the deposit earns no real returns. However, when the inflation is below the current interest rate, it does manage a positive real rate of return.


The interest rate on floating-rate bonds is currently 7.15% (subject to semi-annual reset) for a tenure of seven years.


These bonds are not listed and traded and you cannot take loans against them. You are effectively locked in for a tenure of seven years. However, pre-mature encashment is allowed with a penalty for senior citizens after a minimum lock-in period, which varies from four to six years depending on the age bracket in which the senior citizen falls.

For an individual in the age bracket of 60-70 years, the lock-in period is six years. If the investor is in the age bracket of 70-80, it is five years and four years if his age is 80 or more.

Exit option

You can only exit from floating-rate bonds after their maturity at the end of seven years.

Tax implications

The interest on these bonds is fully taxable. There is no deduction on the principal investment.

Where to buy

They can be purchased from the branches of SBI, other nationalised banks, and any other banks that have been specified by the RBI.


Axis Bank Q1 Results: Profit zooms 91% YoY

Axis Bank on Monday reported a 91 per cent year-on-year (YoY) rise in net profit at Rs 4,125.26 crore for the June quarter compared with Rs 2,160.15 crore in the same quarter last year. 
An ET NOW poll of analysts had anticipated the profit figure at Rs 3,400 crore.

Net interest income (NII) for the quarter rose 21 per cent YoY to Rs 9,384 crore, the private lender said in a BSE filing. Net interest margin (NIM) for the quarter came in at 3.6 per cent, up 14 basis points YoY.Fee income for the quarter jumped 34 per cent YoY to Rs 3,576 crore. Retail fees climbed 43 per cent YoY and constituted 66 per cent of the bank’s total fee income.

The bank said it made specific loan loss provisions worth Rs 777 crore compared with Rs 602 crore in the March quarter. The bank, Axis Bank said, has not utilised Covid provisions during the quarter.

Overall, the private lender held cumulative provisions of Rs 11,830 crore at the end of the June quarter. It is pertinent to note that this is over and above the NPA provisioning included in our PCR calculations. These cumulative provisions translate to a standard asset coverage of 1.70 per cent as on 30 June, 2022. On an aggregated basis, our provision coverage ratio stands at 134 per cent of GNPA," the bank said.

The Gross NPA ratio for the quarter stood at 2.76 per cent compared with 2.82 per cent in the March quarter. Credit cost for the quarter stood at 0.41 per cent, down 129 basis points YoY.

The bank said it issued 9.9 lakh credit cards in June quarter, which is incremental share of 17 per cent for the last six months.

Credit card spends were up 96 per cent YoY for the quarter. The bank said it was the second largest player in merchant acquiring with market share of 17 per cent, accounting for the incremental share of 30 per cent for last three months.

MD & CEO Amitabh Chaudhry said, “As an institution, we continue to make good progress despite the macroeconomic headwinds that pose a challenge at multiple levels, both domestically and to the larger global economy."

The bank said its balance sheet was up 14 per cent YoY at Rs 11,52,580 crores as of 30th June 2022. Total deposits grew 14 per cent YoY on a quarterly average balance (QAB) basis and 13 per cent YoY on a period-end basis.

The lender's advances rose 14 per cent YoY to Rs 7,01,130 crore. The bank’s loan-to-deposit ratio stood at 87 per cent. Retail loans grew 25 per cent YoY to Rs 4,12,683 crore and accounted for 59 per cent of the net advances of the bank. The share of secured retail loans was 79 per cent, with home loans comprising 35 per cent of the retail book. Home loans grew 18 per cent YoY, small business banking 74 per cent YoY and the rural loan portfolio grew 42 per cent YoY.

Unsecured personal loans rose 20 per cent YoY. Credit Card advances jumped 42 per cent YoY. "SME book that remains well diversified across geographies and sectors grew 27% YOY to Rs 71,972 crore. The corporate loan book stood at Rs 2,16,475 crore.


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