Banks' net profit declines by 18% in Q2: CARE Ratings

New Delhi: Net profit of banks during the second quarter declined by 17.8 per cent as a result of fall in other income coupled with slower growth in interest income, CARE Ratings said in a report.

The study takes into account 23 banks. Of this, 13 are private banks and 10 public sector lenders that announced their results on or before November 6, 2017.

However, the decline in net profit was restricted by lower growth in provisions made by the banking sector along with keeping a check on their operating expenses, it said.

Net profit growth for private banks turned around while it fell for public sector banks, it added.

The review is in the backdrop of slowdown in deposit and credit growth, reduction in base rate, repo rate, marginal cost of fund based lending rate (MCLR) and term deposit rate.

Bank credit grew by 2.1 per cent during April-September compared to 3.4 per cent growth recorded in the comparable period last year.

On a year-on-year basis too growth in credit was around 6.9 per cent, lower than 10.1 per cent last year.

Of the 23 banks analysed, total of 9 banks have NPA ratio ranging between 1-5 per cent, 6 between 5-10 per cent, 5 between 10-15 per cent, 2 in the range of 15-20 per cent and 1 bank in the range of 20-25 per cent.

Among PSBs, IDBI Bank has the highest NPA ratio at 24.9 per cent, followed by UCO bank (19.7 per cent), Central Bank of India (17.2 per cent), Punjab National Bank and Andhra Bank at around 13 per cent, it added.