Different strokes

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Uncertainty at the top hits public sector banks (PSBs) hard, while their private sector peers show why steady leadership has a positive bearing on financial performance

The chairman and managing director's position in six PSBs continues to be vacant. The lack of steady leadership in almost all PSBs is reflected in their poor return on assets (RoA) and rising bad loans. Of the six banks that currently have their top positions vacant, five have seen a decline in RoA since 2008.

But the situation is different in private sector banks that have seen steady management in the past few years. Of the top five private banks, only one has seen a decline in the RoA. Unlike PSBs that have seen a significant rise in non-performing assets (NPAs) in the past six years, the NPA situation have remained either stable or has improved significantly for these private sector banks since 2008