New-age banks gain market share

Banks such as Federal Bank, South Indian Bank and City Union Bank are losing out in market share to their new age counterparts in the private sector, said a study which also named ICICI Bank and SBI as the best banks in their respective categories.

However, old-time private sector banks continue to fare better in the growth of net profits, said research company Dun & Bradstreet's report on 'India's top banks'.

The D&B report has found that public sector banks accounted for 74 per cent of total deposits, 73 per cent of total advances and 64 per cent of aggregate net profits among the scheduled commercial banks. On the other hand, the share of new age private sector banks was in the range of 15-17 per cent, it said.

The D&B report said the annual growth rate of old-time private sector banks stood at 7.1 per cent in assets, six per cent in deposits and 12 per cent in advances.

Banks such as Federal Bank, South Indian Bank, City Union Bank and Karnataka Bank are old-time private sector banks, while ICICI Bank, HDFC Bank and Axis Bank are the new-age banks.

New age private sector banks dominated the growth league tables with an average y-o-y growth in assets at 38.7 per cent, deposits at 38.8 per cent and advances at 39.9 per cent, the report said.

However, old-time private sector banks fared better in terms of profitability which stood at an average 30 per cent.

The industry average growth was about 25 per cent for deposits and 31 per cent for advances, the report said.

The report observed that Indian banking sector continues to remain fragmented, with the top 10 banks accounting for 65 per cent and about 40 banks sharing 27 per cent of the assets.

"Fragmentation calls for consolidation, an issue that has not been addressed adequately in the Indian banking industry," it said.

The study was carried out among 80 scheduled commercial banks, including 28 public sector banks, 23 private sector banks and 29 foreign banks.

Of this, the 37 banks listed on the stock exchanges reported a jump of 52 per cent in profits compared to the previous corresponding period.

State Bank of India tops the list among the public sector banks, while ICICI Bank is the best bank in the private sector.

Citibank stands out as the best foreign sector bank, but loses out to Standard Chartered Bank in terms of profitability.