Low NPAs, strong credit growth may steer PSBS profit to record Rs 1.5 lakh cr in FY25

NEW DELHI: Public Sector Banks (PSBs) are on track to achieve a historic milestone, with their profits expected to surpass Rs 1.5 lakh crore in the financial year 2024-25. The robust performance comes on the back of low non-performing assets (NPAs), strong credit growth, and improved financial health.

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In the first half of FY202425 alone, PSBs reported a 25 per cent increase in total net profit, reaching Rs 85,520 crore compared to Rs 68,500 crore in the same period last year. This growth trajectory is expected to continue in the second half, driven by sustained credit demand and improved operational efficiencies.

PSBs have made remarkable progress in asset quality management. The gross NPA ratio declined to 3.12 per cent in September 2024, a significant improvement from the peak of 14.58 per cent in March 2018. This achievement underscores the success of reforms implemented under the "4Rs" strategy Recognition, Recapitalisation, Resolution, and Reform.