Indian banks have bounced back in 10 years with 4-fold jump in profits: Report
The report points out that non-performing loans (Net NPL), which were a bane of the Indian banking sector earlier, have now declined to decadal lows, driven by better asset quality, stronger provision buffers, and an improved capital position.
Indian banks have bounced back over the last 10 years with a 4-fold increase in profits and a sharp decline in bad loans, according to a report by capital markets and investment group CLSA.
"Balance sheets of Indian banks are the strongest they have been in over a decade, and profits have rebounded sharply (quadrupling in 10 years)," the report states.
The report points out that non-performing loans (Net NPL), which were a bane of the Indian banking sector earlier, have now declined to decadal lows, driven by better asset quality, stronger provision buffers, and an improved capital position.
Deposit growth should coincide with the acceleration of loan growth, which increased from 10 per cent to 15 per cent on average over the previous two years during FY12-22, it added.
In the past year and over the last five years, public sector banks have done much better than private sector banks, the report points out.
However, it also noted that in the past decade, the private sector banks have outpaced PSU banks in current account (CA) deposits and have also pared down non-deposit borrowings.
CLSA report also states that the loan growth in the sector has picked up from a decadal average of 10 per cent to 15 per cent over the past two years driven by all sub-segments and possibly some shifts from corporate bond substitution.
Over a long period, loan growth and deposit growth have been in sync. The quality of corporate credit, too, has improved over the past 5-7 years, the report added.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Retirement Planning: SIP+SWP combination; Rs 15,000 monthly SIP for 25 years and then Rs 1,52,000 monthly income for 30 years
Top Gold ETF vs Top Large Cap Mutual Fund 10-year Return Calculator: Which has given higher return on Rs 11 lakh investment; see calculations
Retirement Calculator: 40 years of age, Rs 50,000 monthly expenses; what should be retirement corpus and monthly investment
SBI 444-day FD vs Union Bank of India 333-day FD: Know maturity amount on Rs 4 lakh and Rs 8 lakh investments for general and senior citizens
EPF vs SIP vs PPF Calculator: Rs 12,000 monthly investment for 30 years; which can create highest retirement corpus
Home loan EMI vs Mutual Fund SIP Calculator: Rs 70 lakh home loan EMI for 20 years or SIP equal to EMI for 10 years; which can be easier route to buy home; know maths
12:22 PM IST