In the June quarter of fiscal year 2024-25, public sector banks collectively earned a profit of ₹39,974 crore. The Ministry of Finance will review these results on August 20. The performance of all 12 government banks will be discussed in this meeting, with all banks except PNB having recorded improved profits.
New Delhi: Public sector banks' profit in the June quarter of fiscal year 2024-25 stood at ₹39,974 crore, with SBI earning ₹19,160 crore and Indian Overseas Bank achieving a 76% increase with a profit of ₹1,111 crore. Only Punjab National Bank's profit decreased by 48%. To review these results, the Ministry of Finance will hold a meeting with the heads of all government banks on August 20, which will be chaired by Financial Services Secretary M. Nagaraju.
How Banks Performed in the June Quarter
State Bank of India (SBI) has once again proven its strength. The bank earned a net profit of ₹19,160 crore in the June quarter, which is 12 percent higher on an annual basis. These results indicate that the country's largest bank still maintains a b hold.
Indian Overseas Bank recorded the highest growth this time. The bank's profit jumped by 76 percent to reach ₹1,111 crore. Similarly, Bank of Maharashtra recorded a growth of 23.2 percent and Indian Bank recorded a growth of 23.7 percent.
Central Bank of India also performed well with an increase of 32.8 percent. Punjab & Sind Bank recorded a profit of 48 percent. Overall, the performance of most banks has been better than expected.
Decline in Punjab National Bank's Earnings
Amidst all this, Punjab National Bank's performance was disappointing. The bank's profit decreased by 48 percent to ₹1,675 crore in the June quarter. In the corresponding quarter of the previous fiscal year, this figure was ₹3,252 crore. This time, the bank's income has been almost halved. This decline clearly indicates that the bank still needs to work harder to strengthen its financial position.
Overall, Banks' Record Profit
Government banks earned a record profit of ₹44,218 crore in the June quarter with an annual growth of 11 percent. The combined profit of 12 public sector banks in the first quarter of fiscal year 2024-25 was ₹39,974 crore. This performance indicates that public sector banks are continuously on the path of improvement and are succeeding in increasing their earnings.
Dividend Contribution is Also Important
A significant portion of government banks' earnings reaches the central government. That is why the ministry keeps a close eye on the banks' profits and dividends. This year, the Reserve Bank of India has given ₹2.69 lakh crore to the government as dividend. Similarly, State Bank of India has also given ₹8,076 crore as dividend to the government.
This amount becomes a major source of revenue for the government. From small to large banks, all public sector banks pay a portion of their earnings to the government as dividend.
Why the August 20 Meeting is Important
The meeting called by the Ministry of Finance will thoroughly discuss the banks' quarterly reports. In particular, it will be seen which banks have performed as expected and which banks' position has remained weak. The meeting will be chaired by Financial Services Secretary M. Nagaraju.
The purpose of the review meeting is not only to look at the banks' profits but also to understand their functioning, the status of NPAs (Non-Performing Assets or stressed loans), and future strategies. The ministry will also see which areas need improvement so that the next quarter's results can be even better.
Increased Confidence in Government Banks
For the past few years, it has been continuously observed that the performance of government banks is gradually improving. Many banks that were previously running at a loss are now showing profit. This change is also considered a result of the government's policies and reforms in the banking sector.
The June quarter results clearly show that public sector banks have earned better despite the challenging environment. While SBI and Indian Overseas Bank have shown their strength, a large entity like Punjab National Bank still needs improvement.
