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Wednesday, June 23, 2010

PSBs score over pvt peers in interest income growth

Public sector banks' (PSBs) growth in net interest income (NII) vis-à-vis private banks has been higher during the fourth quarter ending March 2010 as compared with the corresponding period of the previous year, according to a study of 24 PSBs and 12 private banks.Despite higher NII, net profit of the PSBs declined 4.8% during the quarter. However, the fee-based income growth of PSBs, at 14.2%, was marginally higher than that of their private peers, at 14%.The fee-based income of the PSBs increased to Rs 46,460 crore from Rs 40,690 crore.When compared to January-March 2009, NII of the PSBs rose 37.8%, where as private banks registered a 20% increase in their NII. An analyst from the market said, "Healthy credit offtake in non-food credit helped the PSBs to increase the net interest income significantly during the fourth quarter."Among the PSBs, Oriental Bank of Commerce has seen significant increase in NII to Rs 989 crore against Rs 460 crore. "The bank's profit has come out of core operation," said the bank's chairman TY Prabhu. While interest income of the bank rose 14.4% during January-March 2010, total interest expended dropped 10.2% during the same period.However, the highest NII margin was recorded by SBI, at Rs 6,721 crore, among the PSBs, followed by PNB (Rs 2,498 crore) and Bank of Baroda (Rs 1,745 crore), Uco Bank's (Rs 744 crore), Andhra Bank (Rs 656 crore).The rise in NII of private sector banks was comparatively lower during the same period. Among the 12 private sector banks, four banks-IndusInd Bank, Dhanlaxmi Bank, ING Vysya Bank and YES Bank-showed more than 50% increase in NII during the fourth quarter.HDFC Bank had the highest NII of Rs 2,351 crore during the period, followed by ICICI Bank and Axis Bank (Rs 1,460 crore). However, NII of ICICI Bank fell marginally by 4.9% from Rs 2,139 crore to Rs 2,035 crore.


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