Private-sector banks pip PSB peers in profit per employee

The productivity of (profit per employee) private banks was higher than nationalised banks and SBI & associates during 2009-10 and 2008-09. However productivity for all the three group of banks rise during 2009-10.

The average profit per employee of private banks was Rs 7.19 lakh against Rs 5.74 lakh and Rs 4.65 lakh for nationalised banks and SBI & associates, respectively during 2009-10. On the other hand wages to total expenses ratio of SBI & associates was the highest of 17.03% as against 13.65% and 12.76% for PSBs and private banks, respectively during the above period. But the number of employees ( 4.67 lakh) and number of branches (43,187) was highest in nationalised banks compared to SBI & associates and private banks during 2009-10.

YES Bank has emerged as the most efficient private sector bank in the country having scored over all nationalised banks, SBI & associates and private sector banks in profit per employee denominator this study employed to determine the efficiency.

YES Bank stood first with respect to profit per employee followed by ICICI Bank , Axis Bank ,Corporation Bank and IDBI Bank.

The profit per employee of YES Bank was Rs 15.75 lakh as against Rs 12 lakh each for ICICI Bank and Axis Bank, Rs 9.52 lakh for Corporation Bank and Rs 8.44 lakh for IDBI Bank.

Among the above five banks highest increase in efficiency was seen in the case of YES Bank. The profit per employee of YES Bank increased from Rs 11.38 lakh during 2008-09 to Rs 15.75 lakh during 2009-10.

YES Bank?s net profit increased to Rs 478 crore for the year 2009-10 as against Rs 304 crore for the year 2008-09. The increase in profit resulted in an increase in diluted earnings per shares from Rs 10.14 in the year 2008-09 to Rs 14.87 in the year 2009-10.

The wages to total expenses ratio of YES Bank also increased marginally from 11.41% during 2008-09 to 12.34% during 2009-10.

On the other hand lower productivity during 2009-10 was seen in the case of Catholic Syrian Bank, Dhanlaxmi Bank, Bank Of Baroda, Indian Overseas Bank and Central Bank of India.

The profit per employee of Bank Of Baroda decreased from Rs 6.05 lakh during 2008-09 to Rs 0.08 lakh during 2009-10. And wages to total expenses of Bank Of Baroda decreased from 17.34% to 16.14% during the above period. In terms of wages to total expenses ratio, the top five banks are Bank of Rajasthan (which has got merged with ICICI Bank), ING Vysya Bank, SBI, Dhanlaxmi Bank and Indian Overseas Bank. The wages to total expenses ratio of Bank Of Rajasthan increased from 15.90% to 25.18% during 2009-10. The productivity (profit per employee) of the bank turned out to be negative of Rs 2.56 lakh during 2009-10 from a positive of Rs 2.89 lakh during 2008-09.

Lowest wages to total expenses ratio was seen in the case of IDBI Bank, ICICI Bank, SB Of Patiala, City Union Bank and Corporation Bank.