PSBs record 11% growth in first half of FY2024-25, net profit up 25.6%

Public Sector Banks (PSBs) in India registered strong performance in the first half of the fiscal year 2025 with 11% year-on-year (YoY) growth, according to the ministry of finance. As of September 2024, the aggregate business of PSBs reached ₹236.04 lakh crore in the current financial year.

The credit portfolio rose by 12.9% to ₹102.29 lakh crore, while deposits grew by 9.5% to ₹133.75 lakh crore.

Financial performance indicators were also positive, with operating profit for H1FY25 rising to ₹1,50,023 crore, a 14.4% year-on-year increase. Net profit in the same period recorded a 25.6% growth, reaching ₹85,520 crore.

The asset quality of PSBs has also improved, as gross and net non-performing assets (NPAs) declined to 3.12% and 0.63%, respectively.

The capital to risk weighted assets ratio (CRAR) stood at 15.43%, comfortably above the regulatory requirement of 11.5%.

The finance ministry attributed the performance to banking reforms such as the Enhanced Access and Service Excellence (EASE) initiative, the Insolvency and Bankruptcy Code (IBC), and the establishment of the National Asset Reconstruction Company Ltd. (NARCL). These reforms, along with regular review meetings chaired by the finance minister, have helped strengthen governance, enhance credit discipline, and streamline the resolution of stressed assets, according to the ministry.

“The reforms and regular monitoring have addressed many concerns and challenges, and resulted in setting-up enhanced systems and processes for credit discipline, recognition and resolution of stressed assets, responsible lending, improved governance, financial inclusion initiatives, technology adoption etc,” the release said.

“These measures have led to a sustained financial health and robustness of banking sector as a whole which is reflected in the current performance of the PSBs…” it added.