PSB profitability improves

Written by Pradip Kumar Dey | Mumbai, Jan 31 | Updated: Feb 1 2008, 07:03am hrs
It seems like the public sector banks (PSB) seem to be catching up with their private sector peers, especially when it comes to the ability to generate profits from their incomes. The average return on total income (net profit as a percentage of total income) for PSBs increased in third quarter while it declined for private banks.

A study of the return on total income of seven private sector banks and 20 PSBs during the third quarter of FY08 compared with that of the same period in the previous year. shows that profit after tax (PAT) as a percentage of total income, in the case of PSBs , rose from 10.64% to 11.79%.

On the other hand the ratio for the seven private banks decreased from 12.13% to 11.99% over the same period. Around 40% of private banks return on total income decreased during the third quarter.

Bank Of India, Indian Bank and Dena Bank saw significant growth while Allahabad Bank had the highest ratio of 20.28%. Among the private banks, three banks namely HDFC Bank, ICICI Bank and

Centurion Bank of Punjab has a declining ratio.

However, HDFC Bank scored the highest ratio of 14.17% followed by Axis Bank, and Bank Of Rajasthan.