Banks make a record profit of Rs 100,000 crore this year

In FY21, when the economy was pummeling by the epidemic, the banking industry made its highest-ever earnings of Rs 1 lakh crore. This is a considerable improvement above the industry’s net loss of about 5,000 crore in FY19.

Half of the profits in the business came from two banks: HDFC Bank and SBI. HDFC Bank accounted for 30% of overall earnings, or Rs 31,116 crore, a rise of 18% over the previous year. SBI, the country’s largest lender, contributed another 20%, or Rs 20,410 crore. ICICI Bank came in third, with earnings of 16,192 crore, more than double those of the previous year. As public sector banks (PSBs) slowed their lending, private banks gained market share.

PSBs reported a collective net profit for the first time in five years, which was the most significant turnaround. Only two PSU banks, Punjab and Sind Bank and the Central Bank of India, declared a loss during the year. Yes Bank, which continued to make provisions, remained in the red in the private sector, with a net loss of 3,462 crore. However, the losses reported by the two banks in the red were lower than those reported the previous year.

Banks had finished making arrangements for the majority of the loans by March 2020. Banks stopped bleeding as additional provisions were offset by huge recoveries from previously written-off accounts. According to the rating agency ICRA, the profits for the current year include windfall gains on public banks’ bond portfolios, which accounted for two-thirds of their profits before tax in FY21.

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