PSBs Lending

State-owned Union Bank of India on Saturday reported an 18.36 per cent growth in its consolidated net profit for the March quarter to Rs 3,328 crore, helped by lower provisions. For the fiscal 2023-24, the lender reported a consolidated net profit of Rs 13,797 crore against Rs 8,512 crore in the year-ago period. In the quarter under review, its standalone net profit increased to Rs 3,311 crore from Rs 2,782 crore a year ago. The core net interest income grew 14.38 per cent to Rs 9,437 crore on an 11.7 per cent growth in advances and widening of net interest margin to 3.10 per cent from 2.97 per cent in the year-ago period. Its managing director and chief executive A Manimekhalai told reporters that for FY25, it is aiming for a credit growth of 11-13 per cent and deposit growth to be between 9-11 per cent compared to 9.3 per cent in FY24. It, however, expects a fall in NIMs to 2.8-3 per cent, she said, adding that the targets will be reviewed midway through the year. The non-inter

Higher risk weight will increase the cost of capital for such loans for lenders and discourage them to go overboard

State-owned Canara Bank on Monday reported a 75 per cent rise in net profit at Rs 3,535 crore in the June quarter, helped by decline in bad loans and growth in interest income. The Bengaluru-based lender had posted a net profit of Rs 2,022 crore in the year-ago period. Total income in the first quarter of the current fiscal rose to Rs 29,828 crore, from Rs 23,352 crore in the same period a year ago, Canara Bank said in a regulatory filing. Interest earned by the bank improved to Rs 25,004 crore over Rs 18,177 crore in June 2022. The bank's asset quality showed improvement as gross non-performing assets (NPAs) declined to 5.15 per cent of gross advances at the end of the June quarter, from 6.98 per cent a year ago. Similarly, net NPAs or bad loans declined to 1.57 per cent, as against 2.48 per cent in the year-ago period. As a result, provision for bad loans came down to Rs 2,418 crore, as against Rs 2,673 crore allocated in the same quarter a year ago. Capital Adequacy Ratio of

Further, the banks have been asked to effect significant reduction in expenditure on activities other than those pertaining to core business activities

Public sector banks (PSBs), traditionally dominant in lending to small and medium enterprises (SMEs) are now facing a strong challenge mounted by private banks and finance companies to win away this business.According to a TransUnion CIBIL analysis, a combination of high credit demand and relatively low bad loans (low rates of accumulation of non-performing assets or NPAs) makes lending to micro enterprises and SMEs (the MSME sector) among the most attractive of target segments. The MSME credit opportunity stands out in a period where credit growth to large corporates is somewhat constrained.Private banks and non-bank financial companies (NBFCs) have made significant inroads in this segment. The market share here of private banks has grown from 25.4 per cent to to 28.5 per cent and of NBFCs from 7.9 per cent to 10.4 per cent during the two year period from December 2015 to December 2017. In the same period, the market share of PSBs has reduced from 61.5 per cent to 55.4 per cent, ...