Private banks NII up 53% in Q1

Written by Pradip Kumar Dey | Mumbai, Aug 20 | Updated: Aug 21 2008, 06:20am hrs
The net interest income (NII) of private sector banks in the country registered a 53% rise in the first quarter of the current fiscal, reveals an in-house study. Despite this, they have increased their lending rates in recent times. The study, centered on the growth in NII in 26 public sector banks (PSBs) and 17 private sector banks during April- June 2008, reveals that the net interest income for PSBs rose by 10%, where as in the case of private banks, it increased by 53% compared to the same period last fiscal.

An analyst from a broking firm reasoned the rise in NII for private banks thus. Private sector banks are going faster in credit disbursement in case of non-food credit compared to public sector banks, he said.

NII for the 17 private sector banks that constituted the study increased collectively to Rs 6436.79 crore from Rs 4208.10 crore. Seven banks showed more than 50% increase in NII during Q1. These are Yes Bank (121.8%), Axis Bank (92.5%), IndusInd Bank (79.1%), Development Credit Bank (76.1%), HDFC Bank (74.9%), Kotak Mahindra Bank (72.6%) and ING Vysya Bank (52.1%). All private sector banks NII increased during the first quarter, except Dhanalakshmi Bank, Karur Vysya Bank and Lakshmi Vilas Bank. During the quarter, ICICI Bank registered the highest NII of Rs 2089.75 crore followed by HDFC Bank (Rs 1723.47 crore) and Axis Bank (Rs 810.46 crore).

Among PSBs that formed part of the study, State Bank of India registered the highest NII of Rs 4817.66 crore followed by Punjab National Bank (Rs 1444.75 crore) and Bank Of India (Rs 1180.77 crore). The highest increase in NII was for IDBI Bankfrom Rs 62.88 crore to Rs 92.03 crore. This was possible due to improved yield on funds and a relatively lower increase in cost of funds, says the study. The total interest income of IDBI Bank rose 34.8% during April-June 2008. On the other hand, total interest expended by the bank increased by 34.4% during the same period. Bank of Baroda registered an NII Rs 1057.01 crore against Rs 904.38 crore during the same period last fiscal.