Banking sector has a good fourth quarter

Q4 NIM %

Int incomeInt costNIIProvisionNet profit7-Mar8-Mar Public Bank State Bank of India29.0846.985.5837.7126.0843.2335.36 Bank of India33.8838.6925.71-6.4669.1937.0134.75 Canara Bank17.9933.21-12.92-24.53-8.123324.35 IDBI Bank23.9925.7210.94-82.8314.7311.7210.49 Union Bank of India24.2341.19-115.82127.9940.2132.04 Private Bank Axis Bank47.4631.5278.4554.1870.5633.9741.1 HDFC Bank53.4550.6955.7274.1737.1254.7355.55 ICICI Bank25.5424.2929.238.1239.3525.1625.9 ING Vysya Bank28.3831.8121.41-51.15133.1732.9831.19 Kotak Mahindra Bank79.8862.9299.7273.5985.7246.0951.17  The operating expenses of PSBs were almost flat on account of a decline in the wage costs (-13.2 per cent). The wage costs came down partly due to the write-back of excess provisions for employee liabilities following the revised AS-15 norms. The retiring employees also contributed to lower staff costs.  The PSBs registered a strong net profit growth of 28.9 per cent despite a decline in NII of 10 PSBs and modest single digit growth for other banks. The low growth in operating expenses and reduced provisioning were among the major reasons for the high growth in net profit. The wage costs were substantially higher for IDBI Bank and State Bank of Travancore, while they declined in the case of 10 banks, including SBI.  The PBs, however, saw an improvement in NIMs, with stable yields and marginally lower cost of funds. The NII of seven PBs rose by 47.3 per cent, while the NIMs increased by 2.56 percentage points to 35.41 per cent from 32.85 per cent in the previous year.  No wonder, the net profit rose 47.9 per cent despite the higher provision for bad debts (up 22.5 per cent) and corporate tax (up 66.4 per cent).  Most private banks have done some provisioning for stressed cases. Axis Bank and Kotak Mahindra have disclosed the clients' losses, while ICICI and HDFC Bank have been silent on the matter.  The employee costs (+32.2 per cent) of PBs have remained on the higher side due to their rapidly expanding branch presence. ICICI Bank, however, has shown a modest 5.9 per cent rise in employee costs as it reversed the provisions for employee bonuses made in earlier quarters. The operating expenses of HDFC Bank have grown by 61.2 per cent largely on account of a 60.5 per cent rise in employee expenses following an branch expansion.