Bank profits declined for the second quarter in a row in October-December 2004 "" albeit the fall this time was sharper than the previous quarter. |
In the third quarter ended December 2004, the aggregate net profit of 37 listed banks showed an 18.9 per cent decline compared with a modest 8.3 per cent fall in the second quarter ended September 2004. |
|
In percentage term, the near-19 per cent decline in net profit has been the second biggest. The largest fall in net profit (88.6 per cent) was posted during the quarter ended March 2001. |
|
Industry leader State Bank of India (SBI) and 11 other banks bucked the trend with a net profit growth of 23.91 per cent. |
|
Excluding these banks, the net profit of the listed 26 banks declined by 60.3 per cent. |
|
SBI, despite higher provisioning, posted a 19.6 per cent rise in profit on the back of an almost 100 per cent rise in other income and a 32 per cent rise in net interest income. |
|
Aided by other income and improvement in net interest income, Allahabad Bank, IDBI Bank, Corporation Bank, UTI Bank and HDFC Bank posted a decent growth in net profit. |
|
Huge provisioning and a modest 9.1 per cent rise in net interest income were the two main reasons for the underperformance of the 26 banks. |
|
The underperforming banks also suffered on the growth parameter, with interest expense up 3.66 per cent on a 6.76 per cent rise in interest income. Other income declined by 17.1 per cent. |
|
The provisioning for the 26 banks rose 96 per cent, largely on account of the shifting of government securities from the available-for-sales category to the held-to-maturity category by banks. |
|
That apart, a few banks made provisions for the forthcoming wage revision. As a result, the net profit of Bank of Baroda, Syndicate Bank, Canara Bank, Union Bank of India, UCO Bank, Oriental Bank of Commerce and State Bank of Mysore slipped. |
|
The profit-making 12 banks had best of the both the worlds. Interest income of these banks rose 9.53 per cent, while the interest expense declined marginally 1.62 per cent. |
|
Other income rose 34.8 per cent and net interest income rose 27.7 per cent. The provisioning for profitable banks rose 48.8 per cent. |
|
|
|