A study conducted by Dun and Bradstreet (India), the leading provider of global business information, knowledge and insight, on the financial health of banking services in India post-economic slowdown revealed that Small Industrial Development Bank of India’s (SIDBI) performance was on par with some of the leading banking and refinancing institutions in India in terms of profitability and efficiency.
In a comparative study of top refinance institutions, public sector and private sector banks, Dun and Bradstreet (India) revealed that SIDBI reported a robust growth of 27.1 per cent and 51 per cent in total revenue and net profit respectively this year compared to the year-ago period.
The top five public and private sector banks have been chosen on the basis of total income and the comparison has been made on parameters like Growth in Total Income (per cent), Growth in Profit (per cent), Profit per Employee (Rs Lakh), Net NPAs / Net Loans (per cent), Capital Adequacy Ratio (per cent) etc. While SIDBI registered a growth in total income of 27.1 per cent, top five public sector banks such as Punjab National Bank recorded a growth of 36.79 per cent while Bank of India posted 34.05 per cent growth followed by State Bank of India (32.67 per cent), Bank of Baroda (28.74 per cent) and Canara Bank (18.38 per cent) for the financial year 2008-09. While this is so, the growth in total income of top five private sector banks such as HDFC Bank stood at 58.27 per cent followed by Axis Bank (56.04 per cent), Federal Bank (31.65 per cent), Kotak Mahindra Bank (14.14 per cent) and ICICI Bank (shrunk by 2.28 per cent). While SIDBI posted a robust growth in profit of 51 per cent, Axis Bank growth in profit stood at 69.49 per cent followed by HDFC Bank (41.18 per cent) and Federal Bank (36 per cent).
Among the refinancing institutions, SIDBI has fared well. In spite of the global financial crisis, in FY09 SIDBI has reported growth of 27.1 per cent and 51.0 per cent in total revenue and net profit respectively over the previous year. Comparatively, NHB and NABARD reported a growth in profit of 38.82 per cent and 13.37 per cent respectively.
Among the top five public and private sector banks in terms of revenue, SIDBI has outperformed in terms of profit per employee (Rs 31 lakh) which further indicates better manpower efficiency and productivity. The profit per employee of other leading banks such as ICICI Bank stood at Rs 11 lakh followed by Axis Bank (Rs 10.02 lakh), and Bank of India (Rs 7.49 lakh). Additionally, the Capital Adequacy Ratio (CAR) of SIDBI has remained the highest among its peers since 2002. The bank has managed to keep its CAR at 34.2 per cent as on March 31, 2009, well above the minimum stipulated value of 9 per cent.
On the Net NPAs to Net Advances ratio front, the Small Industrial Development Bank of India’s ratio has been the lowest among the top five public and private sector banks. The percentage of net NPA’s to net loans was down from 0.25 per cent as on March 31, 2008 to 0.08 per cent as on March 31, 2009.
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