Banking Sector's Net Worth Hits Record Rs 3 Lakh Crore in FY24

By siliconindia  |  Monday, 20 May 2024, 08:56:29 AM IST

Banking Sector's Net Worth Hits Record Rs 3 Lakh Crore in FY24
For the first time, the banking sector's net profit surpassed Rs 3 lakh crore in FY24. The combined net profit of listed public and private sector banks increased by 39%, reaching Rs 3.1 lakh crore compared to Rs 2.2 lakh crore in FY23.
Public sector banks achieved a record net profit of Rs 1.4 lakh crore for the year, marking a 34% increase over the previous year. Meanwhile, private sector banks boosted their net profit by 42% to nearly Rs 1.7 lakh crore, up from Rs 1.2 lakh crore the year before. Consequently, the earnings gap between the two sectors has widened.
To put this into perspective, Rs 3 lakh crore is roughly equivalent to the total quarterly profits of all listed companies in the first three quarters of the fiscal year. In fact, bank profits significantly surpass those of the IT services sector, which has been the most profitable group in recent years. Listed IT services companies reported a net profit of nearly Rs 1.1 lakh crore for FY24.
In recent years, public sector banks have reduced their profit gap with private banks by cleaning up their balance sheets and boosting earnings. In fact, the net profit of public sector banks has more than quadrupled over the past three years.
Public sector banks would have reported higher net profits in FY24 if not for a one-time provision several banks had to make for pensions. However, because these pension provisions were lower than anticipated, it resulted in gains in their share prices. Additionally, some public sector banks, such as Bank of Baroda, faced a setback due to provisions for their exposure to Go Air, although the loan is collateralized.
On a consolidated basis, Reliance Industries continues to hold the highest annual profit at Rs 79,020 crore. However, on a standalone basis, its profit remained flat at Rs 42,042 crore in FY24. Among the top 10 listed companies, TCS reported a net profit of Rs 43,559 crore for FY24, followed by Indian Oil with Rs 39,618 crore, ONGC with Rs 38,828 crore, and Infosys with Rs 27,234 crore.

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