The performance of the 27 public sector banks during the last decade shows that there has been a marked improvement in efficiency. While total income increased 4.31 times, net profit shot up 10.38 times.
Data available on the performance of public sector banks over the last decade (source: Bank Source) shows that total revenue touched an all-time high of Rs 1,03,500 crore in 2000-01, from Rs 23,998 crore in 1990-91. The aggregate net profit rose to Rs 4,316 crore in FY 2001 from Rs 416 crore in FY 1991.
The growth in net profit and revenue was faster in the initial years (1991-1996) of the period under review. Subsequently, the growth rate slowed down as the base moved up.
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The public sector banks' revenue grew at a compounded annual growth rate (CAGR) of 15.74 per cent in the last 10 years and at a CAGR of 14.05 per cent in last five years. Net profit grew at a CAGR of 26.36 per cent in 10 years. But, for the last five years, the CAGR was a mere 6.75 per cent.
The State Bank of India (SBI) increased its share in the total revenue from 27.82 per cent in FY 1991 to 29 per cent in FY 2001.
Its share in aggregate net profit shot up from 25.7 per cent to 37.2 per cent. SBI's revenue grew 4.5 times (or at a CAGR of 16.22 per cent) while its net profit shot up by 15 times (CAGR of 31.1 per cent) in the period.
The Bank Source data shows that all banks have reported all-time high revenues in FY 2001. However, in terms of net profit, only eight banks touched new peaks in FY 2001.
Canara Bank's net profit zoomed to an all-time high of Rs 285 crore, followed by Corporation Bank (Rs 262 crore) and Syndicate Bank (Rs 235 crore). Vijaya Bank's net profit rose from Rs 3 lakh in FY 1991 to Rs 71 crore in FY 2001.
Dena Bank, however, had a disappointing decade, with a net loss of Rs 266 crore in FY 2001, compared with a profit of Rs 9 crore in FY 1991.
Indian Bank's income rose 2.44 times, while its aggregate net loss in the last 10 years rose to whopping Rs 3,819 crore. Out of ten years, it posted losses on seven occasions.
Most of the subsidiaries of State Bank of India improved their performance, with average revenue in FY 2001 5.75 times the FY 1991 figure, and net profit at 14.35 times.