Public sector banks left behind private banks behind, this reversal was done in the fourth quarter of FY2025
Public sector banks have surpassed private banks in terms of financial results in the fourth quarter of FY 2025. This information was given in the CareI’s report on Wednesday. It states that public sector banks have achieved this success due to expansion in business. According to ANI news, in the fourth quarter, government -owned banks have recorded more profit than their private sector counterparts. The report also stated that Scheduled Commercial Banks (SCBs) collectively saw a slight improvement in their financial performance in the fourth quarter of FY 2025.
How much profit difference between the banks of both sector
According to the news, the net profit of Scheduled Commercial Banks (Scheduled Commercial Bank) rose 4.3 per cent to Rs 0.93 lakh crore on an annual basis in the quarter, while private sector banks (PVB) experienced a decline of 4.7 per cent, which reached Rs 0.42 lakh crore in the fourth quarter of FY 2025. Their net interest income (NII) between the two, the difference between earned interest and the interest paid, supported by stable credit increase, year-to-year (YOY) rose 3.6 per cent to Rs 2.09 lakh crore. However, the rising costs of the deposits partially compensated it, which affected the margin.
Decline in net interest margin
The net interest margin (NIM) for the Schedule Commercial Bank declined by 21 basis points (BPS) on an annual basis and it came to 2.99 percent, mainly due to a slow growth in high-up-up loan segments, slow growth in deposit rates and slow growth in low-cost CASA deposits. Despite the pressure on the margin, the net profit of the Schedule Commercial Bank rose 4.3 percent to Rs 0.93 lakh crore on an annual basis in the quarter. This improvement was caused by business expansion, less provisions and more income from other sources.
Public banks showed impressive growth
In the Schedule Commercial Bank, public sector banks showed impressive growth. Their net profit increased by 13.1 percent to Rs 0.51 lakh crore on an annual basis. This bounce in profit is due to the low base of the previous year, better asset quality, profit from treasury operations and controlled operating expenses. While private sector banks saw a decline of 4.7 percent in net profit, causing their total profit to Rs 0.42 lakh crore in Q4 FY25. The decline was mainly due to the deficit recorded by a major private bank.
The asset quality of the banking sector also improved in the fourth quarter. The pure non-performing asset (NNPA) ratio of the Schedule Commercial Bank came to an all-time low of 0.5 percent as compared to 0.6 percent a year ago. Overall, the report stated that the public sector banks have emerged strong in the fourth quarter, while private banks faced pressure due to different issues in select institutions.
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