PSBs record strong financial performance in Q3 of FY'25

New Delhi: Public Sector Banks (PSBs) in India have demonstrated remarkable financial performance in the first three quarters of the ongoing fiscal year 2024-25, achieving significant growth across key financial parameters.

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According to data available as of December 31, 2024, PSBs registered a record net profit growth of 31.3 percent year-on-year, reaching an all-time high aggregate net profit of Rs 1,29,426 crore. Their aggregate operating profit stood at Rs 2,20,243 crore, reinforcing the sector’s strong financial health.

A notable improvement in asset quality was observed, with the Net Non-Performing Asset (NPA) ratio dropping to a significantly low 0.59 percent. The aggregate net NPA outstanding stood at Rs. 61,252 crore, reflecting enhanced credit discipline and effective resolution mechanisms.

Business growth remained robust, with an aggregate year-on-year growth rate of 11 percent. Deposits grew at a steady 9.8 percent year-on-year, contributing to the total aggregate business of PSBs, which reached Rs. 242.27 lakh crore. Credit growth also witnessed a strong momentum at 12.4 percent, primarily driven by retail credit growth of 16.6 percent, agriculture credit growth of 12.9 percent, and MSME credit growth of 12.5 percent.

Capital adequacy levels of PSBs remained strong, with an aggregate Capital to Risk Weighted Assets Ratio (CRAR) of 14.83 percent, well above the regulatory requirement of 11.5 percent. This ensures that PSBs are well-capitalized and prepared to meet credit demands across various economic sectors, with a particular focus on agriculture, MSMEs, and infrastructure development.

The sustained financial strength of PSBs can be attributed to comprehensive policy and process reforms undertaken in recent years. Enhanced systems for credit discipline, recognition and resolution of stressed assets, responsible lending practices, improved governance, financial inclusion initiatives, and greater technology adoption have all contributed to the sector’s resilience and growth.

With these advancements, PSBs remain well-positioned to support economic growth by providing robust credit flows to critical sectors, thereby playing a pivotal role in India's financial stability and development.

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