Weak Banks Top Profit-Growth Chart

In a turn of fortune, the three erstwhile weak public sector banks _ Indian Bank, Uco Bank and United Bank of India _ have recorded the best performance among the 19 public sector banks during the last financial year.

Uco Bank and United Bank of India have recorded a 400 and 579 per cent increase in net profits in the last fiscal, while Indian Bank has moved into positive territory notching a net profit of Rs 11 crore.

Despite the recessionary trends in the last fiscal, the nationalised banks have recorded an over 64 per cent increase in operating profits in the year 2001-02.

 

Figures for the performance of the 19 public sector banks compiled by the finance ministry shows that the operating profits jumped from Rs 8,054 crore to Rs 13,231 crore, recording a rise of Rs 5,000 crore. This has reflected on net profits as well, with a sharp rise of over 132 per cent in the period.

The best performance in percentage terms was notched by United Bank of India. A bank-wise analysis of the rise shows that the improvements have been spectacular for the erstwhile weak banks like Indian Bank and UCO Bank where the growth in operating profits has been 245 and 262 per cent, respectively.

But, in the absence of disaggregated figures about the components of the operating profit, it is difficult to establish as to what percentage of the rise has been influenced by the appreciation in the value of the government securities held by them, as their interest rates have plummeted.

There has however been a substantial improvement in the capital adequacy ratio of especially the weak PSU banks over the period. Compared to March 31, 2001 when the CRAR was negative for Indian Bank, it has climbed to positive territory at 1.70 by March 31, 2002. Similarly, for United Bank of India, it touched 12.02 from 10.4 per cent a year ago.

In fact, among the 19 banks, only six have recorded a dip in their CRAR. These include Andhra Bank, BOB, Bank of India, Central Bank of India, Dena Bank and Oriental Bank of Commerce.