Dividend payments of major public sector banks (PSBs), in percentage terms, have grown at a higher rate between 2002-03 and 2006-07, compared to an increase in total incomes and net profits during the same period. The dividend payments of major PSBs witnessed a compounded annual growth rate (CAGR) of 17.9% during the period under review, while the average total incomes and net profits of these PSBs increased by 9.71% and 11.62% respectively.
In actual value terms, dividend payments of 21 PSBs steadily increased from Rs 1,749 crore in 2002-03 to Rs 3,382 crore in 2006-07, as against a combined total income rise from Rs 1,15,680 crore to Rs 1,67,573 crore. The combined net profits of these banks increased from Rs 11,383 crore to Rs 17,671 crore in the same period.
Among the 21 PSBs, the highest CAGR in dividend payment was seen in Central Bank of India (60.4%), followed by State Bank of Hyderabad (41.4%) and Allahabad Bank (40.2%). Total dividend payment of Central Bank increased from Rs 15 crore in 2002-03 to Rs 99.41 crore.
The lowest CAGR was witnessed in Bank of India at 3.9%, followed by Bank of Baroda (5.3%) and Oriental Bank of Commerce (7.9%). The dividend payment of Bank of India rose from Rs 146.22 crore in 2002-03 to Rs 170.59 crore in 2006-07.
In total income, Syndicate Bank topped the list at 18.5%, followed by Allahabad Bank (14.8%) and State Bank of Patiala (14.1%). The total income of Syndicate Bank increased from Rs 3,394 crore in 2002-03 Rs 6,692 crore in 2006-07. The lowest CAGR was in Central Bank (5.2%), followed by SBI (5.7%).
In the case of net profit, the highest CAGR was that of Allahabad Bank (45.8%), followed by Indian Overseas Bank (24.7%) and State Bank of Mysore (21.1%). The total net profit of Allahabad Bank increased from Rs 166 crore to Rs 750 crore. The lowest CAGR of net profit was seen in the case of State Bank of Patiala (3.3%) followed by Bank of Maharashtra (5.2%). As against the net profits of Syndicate Bank during the period that rose from Rs 344 crore in 2002-03 to Rs 716 crore in 2006-07, dividend payment outflows rose from Rs 70.80 crore to Rs 146.16 crore.
India?s largest PSB, SBI showed a 13.29% CAGR of dividend payment as against 5.77% and 9.97% CAGR of total income and net profit respectively.
