Private banks? investment income increases by 38.2% in first half

In investment income, private banks showed a significant increase as against a marginal increase for public sector banks (PSBs) in the first half of the fiscal year.

A comparison between 20 private sector banks and 26 PSBs shows that the latter performed better in terms of investment income to total income ratio during April-September 2007 and April-September 2006.

This ratio for private sector banks at the aggregate level showed a marginal decrease during April-September 2007 compared to April-September 2006.

In the case of PSBs too, the ratio showed a decline but it was significant. The ratio was higher in public sector banks compared to private sector banks during both the time-periods.

The aggregate total income of 20 private sector banks increased by 48.2% from Rs 27,225 crore in April-September 2006 to Rs 40,353 crore in April-September 2007. Their total investment income increased by 38.2% during the period, decreasing the investment income to total income ratio from 21.55% in April-September 2006 to 20.09% in April-September 2007.

State-run banks, in contrast, appeared less concerned about investment income. They achieved a 33% growth in total income during April-September 2007, and the investment income increased by 10.6% to Rs 24,883 crore during April-September 2007, from Rs 22,498 crore during April-September 2006.

The investment income to total income ratio decreased significantly from 27.10% in April-September 2006 to 22.54% in April-September 2007.

A significant decrease in the ratio was registered by Bank of Maharashtra. This ratio decreased from 33.77% in April-September 2006 to 26.03% in April-September 2007. As for Allahabad Bank, the ratio decreased significantly from 31.47% in April-September 2006 to 26.46% in April-September 2007. For SBI also, the ratio decreased from 25.63% to 21.10%.

Among private sector banks, Axis Bank showed a significant decline, from 31.17% in April-September 2006 to 24.75% in April-September 2007.

In the case of Karnataka Bank, the ratio decreased from 30.25% to 24.70% during April-September 2007. But ICICI Bank?s ratio increased from 18.04% to 18.53%.

All private sector banks showed an increase in investment income during April-September 2007 while 96% of public sector banks posted an increase.