The combined profit of 12 Indian public sector banks (PSBs) in Q2FY24 jumped 31% to ₹33,643 crore as compared to ₹25,684 crore recorded in the same period of last year. Looking at the H1FY24 performance, the 12 PSU lenders posted a net profit of ₹68,061 crore, an increase of 66% over H1FY23’s net profit of ₹40,991 crore.
Leading the pack is Punjab National Bank, which has demonstrated the highest net profit growth in Q2FY24. On October 26, the bank reported a 327% YoY rise in its net profit to ₹1,756 crore for Q2FY24. In the same quarter of last year, the bank reported a net profit of ₹411 crore.
During the preceding June quarter (Q1FY24), the bank recorded a net profit of ₹1,255 crore. The bank’s provisions dropped 29.8% YoY to ₹3,444 crore in Q2FY24.
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Central Bank of India secured the second position with a net profit growth of over 90%, attributed to improvements in asset quality. The bank reported its highest-ever quarterly net profit of ₹605 crore in Q2FY24, compared to a net profit of ₹318 crore in Q2FY23.
The gross NPA ratio of the bank dropped to 4.62% in Q2FY24 from 9.67% in Q2FY23, while the net NPA ratio stood at 1.64% in Q2FY24, down from 2.95% in Q2FY23.
Union Bank of India followed closely, posting a 90% growth in net profit to ₹3,511 crore in Q2FY24, as compared to a profit of ₹1,847.7 crore in the September quarter of FY 2022-23. The bank’s net interest income (NII) improved by 28.88% to reach ₹2,432 crore in Q2FY24, compared to ₹1,887 crore in the same period a year ago.
Following the bank’s Q2 numbers, domestic brokerage firm Motilal Oswal retained its ‘buy’ call on the stock with a target price of ₹125 apiece.
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Similarly, Bank of Maharashtra also delivered a 72% rise in Q2 net profit to ₹920 crore as compared to a net profit of ₹535 crore in Q2FY23. The net interest income (NII) of the bank improved by 28.88% to ₹2,432 crore in Q2FY24, as against ₹1,887 crore in the same period a year ago.
| Bank Name | Q2FY24 net profit ( ₹in Crores) | YoY Growth |
| Punjab National Bank | 1,756 | 327% |
| Central Bank of India | 605 | 90.25% |
| Union Bank of India | 3,511 | 90% |
| Bank of Maharashtra | 920 | 72% |
| Indian Bank | 1,988 | 62.2% |
| Bank of India | 1,458 | 52% |
| Canara Bank | 3,606 | 43% |
| Bank of Baroda | 4,253 | 28.37% |
| Indian Overseas Bank | 625 | 24.75% |
| State Bank of India | 14,330 | 8.02% |
| Total | 33,643 | |
| Source: Bank’s earnings report |
Indian Bank also delivered an impressive performance in Q2FY24, with its net profit growing 62.2% to reach ₹1,988 crore. During the same period of the last year, the bank recorded a net profit of ₹1,225 crore.
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Meanwhile, the country’s largest bank, State Bank of India (SBI), delivered another strong performance in the September quarter, exceeding the Street estimates. The bank’s net profit for the quarter jumped by 8% to reach ₹14,330 crore, up from ₹13,264.5 crore in Q2FY23. The bank’s net interest income grew by 12.3% to ₹39,500 crore from ₹35,183.4 crore in the year-ago quarter.
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Following the bank’s healthy performance, several domestic brokerage firms maintained their ‘buy’ rating on the stock, providing target prices in the range of ₹700 to ₹725.
Motilal Oswal Financial Services retained its ‘buy’ recommendation on the stock with an unchanged target price of ₹700 apiece, while another brokerage firm, Nuvama Institutional Equities, also retained its ‘buy’ rating on SBI, setting a target price of ₹705 apiece.
Similarly, Antique Stock Broking and Kotak Institutional Equities also maintained their ‘buy’ rating on the stock with a target price of ₹725 each.
On the flip side, Punjab and Sind Bank and UCO Bank reported a decline in their net profit during September, with the former experiencing a 32% drop to ₹189 crore and the latter with a net profit of ₹402 crore, down from ₹505 crore in Q2FY23.
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Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Updated: 06 Nov 2023, 01:03 PM IST