India's Banking Sector Hits Rs 3 Trillion in FY24

FY24 sees Indian banking sector's net profit soar to Rs 3.1 trillion, surpassing IT giants. Private banks lead with 42% growth; PSU banks quadruple profits in 3 years.

Bhakti Kothari
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The net profit of the banking sector in the fiscal year 2023-’24 (FY24) was Rs 3.1 lakh crore, marking a 39-per cent growth from the FY23 profit figure of Rs 2.2 lakh. This is the first time the overall net profit of listed public and private sector banks has exceeded Rs 3 lakh crore in a fiscal year.

Bank profits have this year notably beaten the IT sector, the segment that has been seeing the biggest profit margins in recent years. India’s listed IT services firms saw net profit of around Rs 1.1 lakh crore in FY24.

The gap in earnings between the two banking sectors, however, increased this year.

Private sector banks led the way with a 42 per cent rise in numbers, recording a net profit of around Rs 1.7 lakh crore. The figure stood at Rs 1.2 lakh crore in the last fiscal. Public sector banks recorded a 34 per cent rise compared to FY23, garnering a net profit of Rs 1.4 crore.

The data suggests that the net profit in the public sector could have been higher for FY24 had it not been for a one-time pension provision that several banks in this segment had to accommodate. The pension provisions were, however, below what was expected, and as an outcome share prices of public sector banks registered profits. Then there were cases such as Bank of Baroda that experienced the impediment of exposure to their borrower Go Air, which hindered net profit.

Public sector banks had managed to more than quadruple net profit over the past three years by bringing down profit margin compared to private banks, by securing robust earnings and maintaining balance sheets with low to no debts.

Among Indian companies, Reliance Industries recorded an annual profit of Rs 79,020 crore on a consolidated basis in FY24. This was the biggest for any Indian company, as in the past years. On a standalone basis, the profit of Reliance remained steady at Rs 42,042 crore.

TCS led the net profit charts among the top 10 listed companies in FY24 with Rs 43,559 crore, Indian Oil was second with Rs 39,618 crore, followed by ONGC with Rs 38,828 crore and Infosys with Rs 27,234 crore.