Nineteen state-owned banks that have so far declared their March quarter results set aside Rs 1.14 as provision against every rupee earned during the latest three-month period, data from Capitaline showed. This marks an improvement from the January-March quarter of FY16, when the same set of banks had provided nearly Rs 2 for every rupee earned. Bank of India and Corporation Bank are yet to release their Q4 results. The operating profit of these 19 banks for the quarter aggregated Rs 41,948.64 crore, while their provisions added up to Rs 48,238.41 crore. The corresponding figures in the year-ago period were Rs 30,567.96 crore and Rs 60,594.39 crore, respectively.
Private banks, on the other hand, saw a marginal worsening in their provisions-to-operating profit ratio. The 16 privately-owned lenders that have detailed their Q4 numbers so far provided 38 paise for every rupee earned, as compared to 36 paise in Q4 of FY16. Their total provisions added up to Rs 9,441.32 crore and the aggregate operating profit stood at Rs 24,584.87 crore. City Union Bank and Tamilnad Mercantile Bank have not declared their results so far.
Among state-owned lenders, Syndicate Bank clocked the most significant improvement in the operating profit, which jumped more than 14 times to Rs 1,514.39 crore. The other bank to see a sizable rise in the operating profit was Punjab National Bank (PNB). The 138% growth in the operating profit to Rs 6,231.79 crore, however, would not have materialised without a pension write-back. In a note dated May 17, Credit Suisse wrote, “PNB reported another quarter with an operating loss. Adjusting for reversal of Rs 2,000 crore of employee pension provisions, it would have had a PBT (profit before tax) loss of Rs 1,600 crore.”
Bank of Baroda (BoB) was the most successful in reducing provisions on a year-on-year (y-o-y) basis, with the figure dropping 61.7% to Rs 2,622.97 crore. Even BoB’s gains on this front came on the back of lower pension provisions and a high base. SBI saw an improvement on both the metrics, with operating profit rising nearly 13% y-o-y to Rs 16,026.46 crore and provisions falling around 11% to Rs 11,740.09 crore. Provisions for bad loans fell 9.4% to Rs 10,992.92 crore.