Public sector banks (PSBs) continue to outperform private banks in terms of book value. A comparison between nine private sector banks operating in the country and 23 PSBs shows that PSBs performed better in terms of book-value during 2008-09.
In the case of PSBs, book value at the aggregate level showed a significant increase during 2008-09, as against the previous year, while in the case of private banks, it showed a moderate increase.
An analyst from a rating agency said, ?Private sector banks have come out with follow on public issue/private placements at a substantial premium to book value. This leads to higher accumulation of net worth and thereby higher book values for private sector banks as compared with PSBs.?
The aggregate net worth of 23 PSBs have increased by 18.9% to Rs 1.66 lakh crore in 2008-09 from Rs 1.39 lakh crore in 2007-08. But their equity capitals have decreased from Rs 8,735 crore to Rs 8,488 crore during the same period. The average book value of the PSBs increased 22.4% to Rs 195.09 in 2008-09 from the level of Rs 159.34 in 2007-08.
Among the PSBs, the highest increase in book value was seen in the case of Uco Bank, followed by State Bank of Mysore and Bank of India. The highest increase in book value of Uco Bank can be explained from its performance. The net worth of the bank increased by 12.5% to Rs 2,795 crore during 2007-08 from of Rs 2,484 crore in the year-ago period. The equity capital of the bank also decreased from Rs 799 crore to Rs 549 crore. Lowest book-value was registered by Bank of Maharashtra in 2008-09.
Private banks, on the other hand, has achieved a 12.2% growth in net worth during 2008-09, while the equity capital has increased to Rs 3,234 crore in 2008-09 from Rs 3,042 crore in 2007-08. So the aggregate book-value of nine private banks increased 5.5% to Rs 258.49 in 2008-09 from Rs 244.97 in the last year.
Among the private banks, the highest increase in book-value was registered by Dhanalakshmi Bank , followed by Yes Bank and Axis Bank.
The highest increase in book-value of Dhanalakshmi Bank can be explained from its performance, too. Net worth of the bank increased 162.9% to Rs 407 crore during 2008-09 from the level of Rs 155 crore during 2007-08. The equity capital of the bank also increased 100% to Rs 64 crore from Rs 32 crore.
South Ind Bank has registered a fall in book-value in 2008-09 from the previous year. The book-value of South Ind Bank decreased from Rs 126.34 in 2007-08 to Rs 113.76 in 2008-09.
