Pri­vate sec­tor banks’ profit share rises be­yond 100%

Banking Frontiers - - Research Notes - Psu Vs Private Sector - Mehul@bank­ingfron­tiers.com

With a 27.5% share in ad­vances and bet­ter as­set qual­ity, pri­vate sec­tor banks had an even higher share of 33% in the net in­ter­est in­come (NII), 35% in the op­er­at­ing prof­its and more than 100% of the profit be­fore taxes of the bank­ing sec­tor dur­ing FY2017, says ICRA study. This is against a 19.9% share in ad­vances, 25% share in NII, 28% share in op­er­at­ing prof­its and 49% of pub­lic sec­tor banks dur­ing FY2014. With al­most 90% of the trans­ac­tions be­ing done through the dig­i­tal chan­nels and ATMs and elec­tronic ver­i­fi­ca­tion (e-KYC) of cus­tomers for new ac­counts open­ing, ICRA ex­pects pri­vate sec­tor banks can fur­ther ac­cel­er­ate the pace of re­tail cus­tomer ad­di­tion, which can en­able them to ac­cel­er­ate the de­posit growth and main­tain the higher share of CASA in their over­all de­posits.

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