Public banks lag private peers in Q1

Public sector banks (PSBs) lagged their private sector counterparts in the first quarter of 2006-07 with their combined net profit staying at the same level as a year earlier. A major drag on the Q1 show was owing to State Bank of India (SBI), which reported 34 per cent fall in profit.

SBI, which reported 35 per cent fall in net profit, dented the net profit growth of the banking sector in the first quarter of 2006-07.

If one excludes SBI from the total sample, the aggregate net profit of the remaining 28 banks increased by 30 per cent and public sector banks by 34 per cent during the quarter.

An analysis of 29 banks "" 15 private sector and 14 public sector "" which have declared their first quarter results so far shows their combined net profit increased by 8.2 per cent in the first quarter of 2006-07 against a 10 per cent fall a year earlier. Private banks reported 26 per cent rise in their aggregate net profit over a year earlier.

The combined year-on-year net profit of twenty-nine commercial banks in April-June 2006 has grown, though in single digit, against a fall in the first quarter of 2005-06.

Private sector banks have been reporting over 20 per cent growth in net profit over the last five quarters. On the other hand, public sector banks reported a fall in net profit in the fourth quarter of 2005-06 and flat net profit in the first quarter of 2006-07.

The aggregate net profit of 15 private sector banks increased to Rs 1,400 crore in April-June 2006 from Rs 1,109 crore a year earlier and of 14 public sector banks to Rs 2,467 crore against Rs 2,466 crore.

The aggregate net profit of 29 banks was Rs 3,867.43 crore in April-June 2006 against Rs 3,575.25 crore a year earlier.

The aggregate net profit of the banks has grown by single digit for the second consecutive quarter in the three months ended June 30, 2006. In the quarter ended March 31, 2006, the banks had posted a mere 1.1 per cent year-on-year growth in net profit.

Total interest income of these banks increased by 40 per cent to Rs 23,288 crore (Rs 16,653 crore) and income from other sources by 20 per cent to Rs 6,432 crore (Rs 5,376 crore).

Their interest expenditure rose by 24 per cent to Rs 21,838 crore (Rs 17,633 crore). The twenty-nine banks spent Rs 5,690 crore on employees, 21 per cent more than Rs 4,723 crore a year earlier and made 38 per cent higher tax provisions at Rs 1,735 crore (Rs 1,257 crore).

Allahabad Bank, Corporation Bank and Punjab National Bank have not yet declared their quarterly results. The country's second largest bank, ICICI Bank's net profit increased by 17 per cent to Rs 620 crore (Rs 530 crore) and HDFC Bank 30 per cent to Rs 239 crore (Rs 184 crore).

Dena Bank reported net profit of Rs 18.49 crore against a loss of Rs 189.30 crore a year earlier. United Western Bank reduced its losses more than 59 per cent from Rs 14.64 crore to Rs 6.08 crore.

The net profit of Bank of Rajasthan, State Bank of Bikaner and Jaipur, South Indian Bank, Vijaya Bank and Centurion Bank more than doubled, while that of Yes Bank and ING Vysya rose more than 50 per cent.