PSBs outperform private banks in Q2

The public sector banks (PSBs) are giving a tough competition to their private peers, if the second quarter performance of the banks in the current fiscal is anything to go by.

The PSBs have showed an increase of 20.1% and 17.5% in their net profit and total income, respectively, as against 17.9% and 3% recorded by the private banks in the second quarter of the fiscal . A comparison between 25 PSBs and 17 major private banks shows the former clan performed significantly better in terms of profitability during the July-September 2009 compared to the year-ago period.

However, net profit to total income ratio for the private sector banks, at the aggregate level, showed an increase during the period under review. In fact, the ratio was higher in private banks compared to the PSBs.

The aggregate total income of 17 private sector banks have increased to Rs 25,111 crore in July-September ?09 from Rs 24,390 crore in the corresponding period of the last fiscal. Their total net profit has increased to Rs 3,118 crore from Rs 2,644 crore in July- September ?08, increasing the net profit to total income ratio from 10.84% to 12.42%.

Highest increase in net profit during the quarter this year was registered by Lakshmi Vilas Bank, followed by Kotak Mahindra Bank and IndusInd Bank.

State-run banks, on the other hand, appeared more concerned about profitability. Their total income increased to Rs 85,129 crore from Rs 72,421 crore, and net profit has increased to Rs 9,521 crore during the quarter from Rs 7,927 crore. Consequently, the profitability ratio rose to 11.18% during the study period from 10.95% .

Among the PSBs,highest increase in net profit was recorded by Allahabad Bank, followed by Central Bank of India and Canara Bank. Significant increase in the ratio was seen in the case of Allahabad Bank.The net profit to total income ratio of Allahabad Bank increased to 13.61% from 2.11%. In case of Canara Bank, the ratio rose to 16.25% from 11.90%. But Bank Of India saw a drop in the ratio from 16.54% to 6.85% during the period. Top three PSBs, in terms of profitability ratio during the quarter, are Indian Bank, Canara Bank and Andhra Bank.

Among private sector banks, Kotak Mahindra Bank showed significant increase in the ratio, from 5.93% in July-September ?08 to 14.24%. Similarly, Yes Bank?s ratio increased to 16.46% from 11.16% to 16.46% and to 12.26% from 10.44% for ICICI Bank.Fee-based revenue enabled ICICI Bank to increase the profitability ratio.Top three private banks in terms of profitability ratio in during the quarter are Karur Vysya Bank, Yes Bank and City Union Bank. All private sector banks, except seven, showed an increase in the profitability ratio, while 68% of PSBs showed an increase in the net profit to total income ratio during the same period.