Indian public sector banks (PSBs) demonstrated stronger financial performance compared to their private sector counterparts in the fourth quarter of fiscal year 2025, according to a recent report.
The report indicates that PSBs experienced a 13.1% year-on-year increase in net profit, reaching Rs 0.51 lakh crore. This growth was driven by improved asset quality, gains from treasury operations, and controlled operating expenses.
Conversely, private sector banks (PVBs) saw a 4.7% decline in net profit, totaling Rs 0.42 lakh crore. This decline was primarily attributed to losses incurred by a major private bank due to accounting issues and challenges in the microfinance segment.
The overall net profit for Scheduled Commercial Banks (SCBs) increased by 4.3% year-on-year to Rs 0.93 lakh crore. The Net Interest Margin (NIM) for SCBs declined 21 basis points (bps) year-on-year to 2.99%.
The banking sector's asset quality improved, with the Net Non-Performing Asset (NNPA) ratio of SCBs dropping to an all-time low of 0.5%.
The report suggests that public sector banks have shown resilience, while private banks faced pressure due to specific issues within certain institutions.