The banking sector is probably going to publish good numbers in the fourth quarter ended March 2023, and the overall revenue of public sector banks (PSBs) is predicted to contact a report excessive of Rs 1 lakh crore in FY23, aided by the decline in dangerous loans and wholesome mortgage progress.
According to a senior financial institution official, the nation’s greatest lender State Bank of India (SBI) anticipated to earn a revenue above Rs 40,000 crore in the monetary 12 months ended March 2023. In the primary 9 months of the earlier monetary 12 months, the financial institution’s bottomline stood at Rs 33,538 crore, larger than Rs 31,675.98 crore recorded in FY22.
Similarly, different public sector lenders are additionally seemingly to report encouraging numbers, helped by a decline in non-performing belongings (NPAs), moderation in slippages, double-digit credit score progress and rising rate of interest.
For the primary 9 months of 2022-23, all 12 PSBs have earned a cumulative revenue of Rs 70,166 crore in contrast to Rs 48,983 crore in the year-ago interval, a rise of 43 per cent.
“The pattern would proceed in the fourth quarter. It is pretty attainable that PSBs can be incomes round Rs 30,000 crore in the fourth quarter and thus shut the monetary 12 months 2022-23 with a revenue of Rs 1 lakh crore,” Punjab & Sind Bank managing director Swarup Kumar Saha told PTI.
PNB’s net profit for the third quarter was down 44 per cent to Rs 628 crore due to higher provisioning. SBI recorded the highest net profit of Rs 14,205 crore, an increase of 68 per cent.
However, Saha said, there would be pressure on the net interest margin of all banks due to rising deposit rates and a decline in current accounts and savings accounts (CASA).
Most banks have recorded healthy loan growth in the fourth quarter despite rising interest rates, he added.
For PSBs, brokerage firm Emkay Global Financial Services Ltd in its research report said provisioning is likely to ease on a quarter-on-quarter basis, given that the bulk of PCR (provisioning coverage ratio) build-up has largely been done and NPAs are likely to trend down.
However, it said, a recent prescription by the RBI to build specific provisions on large conglomerates would call for some additional provisions for corporate-heavy large banks. That said, these large banks can dip into contingent buffers to offset these specific provisions.
“On overall, we expect ICICI Bank to report strong profitability among large banks, while Axis Bank is expected to sink into losses due to write-offs of goodwill on Citi Bank’s portfolio acquisition. IndusInd Bank too should report healthy profitability, led by better growth and lower provisions,” it mentioned.
Notwithstanding some margin cool-off, it mentioned, Federal can also be anticipated to report wholesome profitability, whereas RBL is predicted to report higher profitability (1 per cent RoA) versus Q3.
Private banks elevated their revenue by 33 per cent to Rs 36,512 crore in Q3 from Rs 27,370 crore in the earlier 12 months. Except for Bandhan Bank and Yes Bank, all personal lenders too reported a rise in internet revenue in Q3. HDFC Bank’s internet revenue of Rs 12,259 crore accounted for 45 per cent of the personal banks’ revenue.
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