An Fe study of 25 PSBs and 15 private sector banks showed that capital market advances of PSBs rose by 18.3% against 8.1% for private banks. For the financial year 2010-11, capital market advances totalled R43,657 crore for PSBs against R24,674 crore for private banks.
Canara Bank topped the charts with 84% increase in capital market advances. Its capital market advances almost doubled from R1,777 crore for FY10 to R3,264 crore for FY11.
However, its ratio of capital market advances to total advances remained relatively lower at 1.54% (1.05% in the previous year) compared to its peers. The largest public sector bank SBI showed a healthy growth of 30.9% in its advances to capital market during 2010-11 while Punjab National Bank loans to the sector grew only grew 6%. The capital market advances fell 5% for ICICI Bank during 2010-11 while it was up 6% and 18% for HDFC Bank and Axis bank, respectively.
In 2010-11, the highest advances to capital market was observed in case of ICICI Bank (R10,585 crore), HDFC Bank (R 6,020 crore) and Axis Bank (R 3,542 crore). Total advances of ICICI Bank increased by 19.4% to R2.16 lakh crore during 2010-11 while the ratio of advances to capital market to total advances decreased from 6.14% to 4.89%. Among bigger banks, in percentage terms, ICICI Bank had highest exposure to capital markets followed by HDFC Bank (3.76%), Axis (2.49%) and PNB (1.57%).
Interestingly, among the 15 private banks, Yes Bank, City Union Bank and Dhanlaxmi Bank showed more than 200% increase in their advances to capital market during FY11. Also more than 20% decline in advances to capital market was noticed in the case of Lakshmi Vilas Bank and TN Mercantile Bank. Lowest increase in advances to capital market was witnessed in the case of Karnataka Bank. The advances to capital market of Karnataka Bank increased from R237.82 crore in 2009-10 to R 247.29 crore in 2010-11.