Public sector banks post record ₹1.78 tn profit in FY25, growth up 26%

Public sector banks' cumulative profit rose to a record level of Rs 1.78 lakh crore in the fiscal year ended March 2025, registering a growth of 26 per cent over the previous year.

All 12 public sector banks had earned a total profit of Rs 1.41 lakh crore in FY24.

The year-on-year increase in profit in absolute terms rose by about Rs 37,100 crore in FY25.

Out of the total profit of Rs 1,78,364 crore earned during the FY25, market leader State Bank of India (SBI) alone contributed over 40 per cent of the total earnings, as per the published numbers on stock exchanges.

SBI logged a net profit of Rs 70,901 crore in FY25, 16 per cent higher than the previous fiscal (Rs 61,077 crore).

In percentage terms, Delhi-based Punjab National Bank reported the highest net profit growth of 102 per cent to Rs 16,630 crore, followed by Punjab & Sind Bank with a 71 per cent rise to Rs 1,016 crore.

During the year, all 12 public sector banks (PSBs) reported a rise in profit.

Among the banks, which recorded over 40 per cent annual jump in their net profit are Central Bank India with a 48.4 per cent growth to Rs 3,785 crore, while UCO Bank posted a 47.8 per cent rise to Rs 2,445 crore and Bank of India registered a 45.9 per cent rise to Rs 9,219 crore.

Pune-based Bank of Maharashtra posted a 36.1 per cent improvement in its net profit to Rs 5,520 crore, followed by Chennai-based Indian Bank with a 35.4 per cent rise to Rs 10,918 crore in FY25.

PSB is a turnaround story from record losses of Rs 85,390 in FY18 to record profit in FY25.

The doom-to-bloom story of the public sector banking industry can be attributed to the initiatives and spate of reforms undertaken by the government led by Prime Minister Narendra Modi, along with former finance minister Arun Jaitley, his successor Nirmala Sitharaman and financial services secretary Rajiv Kumar and his successors.

The government has implemented a comprehensive 4R strategy: Recognising NPAs transparently, Resolution and recovery, Recapitalising PSBs, and Reforms in the financial ecosystem.

As part of the strategy, the government infused an unprecedented Rs 3,10,997 crore to recapitalise PSBs during the last five financial years -- from 2016-17 to 2020-21. The recapitalisation programme provided much-needed support to the PSBs and prevented the possibility of any default on their part.

The reforms undertaken by the government over the last eleven years addressed credit discipline, ensured responsible lending and improved governance. Besides, there was the adoption of technology, and the amalgamation of banks, and the general confidence of bankers was maintained.