PSBs outshine private banks net interest income in first half

Written by Pradip Kumar Dey | Mumbai, Dec 3 | Updated: Dec 4 2007, 06:23am hrs
Private banks growth in net interest income (NII) vis--vis public sector banks (PSBs) has been higher during April-September 2007 as compared to April-September 2006. A study of growth in NII of 26 PSBs and 20 private sector banks during April-September 2007 and April-September 2006 proves this point. Between April-September 2007 and April-September 2006, NII, in the case of PSBs, rose by 7.4% to Rs 30,663 crore from Rs 28,547 crore.

The highest increase in the NII was in the case of Bank of India. NII of the bank increased from Rs 1,614 crore to Rs 1,933 crore with a 38.2% increase in interest income during April-September 2007. On the other hand, interest expenditure increased by 50% during the same period. In the case of Corporation Bank, the NII increased from Rs 604 crore to Rs 707 crore. Bank of Baroda had a NII of Rs 1,616 crore during April-September 2006, which rose to Rs 1,886 crore during April-September 2007. SBI, the largest PSB, showed a growth of 12.6% in its NII during April-September 2007.

During April-September 2007, private sector banks had higher growth in NII compared to PSBs. Among the 20 private sector banks, five banks namely YES Bank, Kotak Mahindra Bank, DCB, Ratnakar Bank and Axis Bank showed more than 50% increase in their NII during the first half. Between April-September 2007 and April-September 2006, NII of 20 private sector banks increased by 32.6% to Rs 7,323 crore from Rs 2,386 crore. One interesting thing is that all the private sector banks NII increased during H1.

More than 25 % increase in NII was seen in the case of HDFC Bank, ICICI Bank, Centurion Bnnk, Karnataka Bank and City Union Bank. The lowest increase in spread was witnessed in the case of J & K Bank (3.9%). The interest income and interest expenditure of J & K Bank increased by 28% and 44.5% respectively during April-September 2007. In H1, the highest NII was observed in the case of ICICI Bank (Rs 722 crore) followed by HDFC Bank (Rs 602 crore) and Axis Bank (Rs 371 crore).

The interest income and expenditure of ICICI Bank increased by 48.5% and 55.3% respectively during April-September 2007. From the above analysis one thing is clear that the NII increased significantly in the case of private sector banks compared to PSBs during first quater.