Synopsis: In FY24, the banking sector's net profit surpassed ₹3 lakh crore for the first time, with public sector banks contributing ₹1.4 lakh crore and private sector banks reaching nearly ₹1.7 lakh crore. This represents a 39% increase from the previous year.
In FY24, the banking sector's net profit exceeded ₹3 lakh crore, with public sector banks contributing ₹1.4 lakh crore. Private sector banks and IT services also saw significant growth due to stronger balance sheets and better performance. Notable profit leaders included Reliance Industries, TCS, Indian Oil, ONGC, Infosys, and Bank of Baroda.
MUMBAI: For the first time, the banking sector's net profit surpassed ₹3 lakh crore in FY24.
The combined net profit of listed public and private sector banks rose 39% to ₹3.1 lakh crore from ₹2.2 lakh crore in FY23.
Public sector banks achieved a record net profit of ₹1.4 lakh crore, up 34% from the previous year, while private sector banks saw a 42% increase, reaching nearly ₹1.7 lakh crore compared to ₹1.2 lakh crore the previous year.
This has widened the earnings gap between the two sectors.
To put it into perspective, ₹3 lakh crore is roughly equivalent to the total quarterly profits of all listed companies in the first three quarters of the fiscal year.
Bank profits now surpass those of IT services, which were previously the most profitable sector, with listed IT services companies reporting a net profit of nearly ₹1.1 lakh crore for FY24.
In recent years, public sector banks have reduced the profit gap with private banks by cleaning up their balance sheets and boosting earnings.
In fact, the net profit of public sector banks has more than quadrupled in the last three years.
Public sector banks would have reported higher net profits in FY24 if not for a one-time pension provision, which turned out to be less than expected, boosting their shares.
Some public sector banks, like Bank of Baroda, also faced provisions due to their exposure to Go Air, although the loan is collateralized.
On a consolidated basis, Reliance Industries remains the most profitable with an annual profit of ₹79,020 crore.
However, its standalone profit was flat at ₹42,042 crore in FY24.
Among the top 10 listed companies, TCS reported a net profit of ₹43,559 crore, Indian Oil ₹39,618 crore, ONGC ₹38,828 crore, and Infosys ₹27,234 crore.
In conclusion, FY24 marked a significant milestone for the banking sector with net profits surpassing ₹3 lakh crore, driven by strong performances from both public and private sector banks.
Public sector banks, despite facing one-time pension provisions, saw substantial profit growth, highlighting their improved financial health.
The profits of the banking sector now exceed those of the traditionally leading IT services sector, indicating a shift in the profit landscape.
Major companies like Reliance Industries, TCS, and Infosys continue to be key players in this dynamic environment.
Related Questions
1. What was the total net profit of the banking sector in FY24?
The total net profit of the banking sector in FY24 exceeded ₹3 lakh crore.
2. How much did public sector banks contribute to the total net profit in FY24?
Public sector banks contributed ₹1.4 lakh crore to the total net profit in FY24.
3. Which sector was the most profitable before the banking sector surpassed it in FY24?
The IT services sector was the most profitable before the banking sector surpassed it in FY24.
4. Which company remained the most profitable on a consolidated basis in FY24?
Reliance Industries remained the most profitable on a consolidated basis in FY24.
5. How did public sector banks manage to reduce the profit gap with private banks?
Public sector banks managed to reduce the profit gap with private banks by cleaning up their balance sheets and boosting earnings.
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