Three public sector lenders in India, Uco Bank, Central Bank of India, and Bank of India, have reported significant gains in their net profit after tax for the September quarter. Uco Bank’s net profit increased by 2.8% to ₹620 crore, while Bank of India’s net profit rose by 7.6% to ₹2,555 crore, and Central Bank of India’s net profit surged by 32.8% to ₹1,213 crore. The increase in profit can be attributed to higher interest income and lower provisions.
However, all three banks experienced a drop in net interest margins (NIMs), which is the difference between the interest income generated from assets and the interest paid out on liabilities. Bank of India’s NIMs fell to 2.41% from 2.81%, while Central Bank of India’s NIMs declined to 2.89% from 3.41%, and Uco Bank’s NIMs stood at 2.90% from 3.10%. Despite this, bank officials expect the pressure on NIMs to reduce in the third quarter.
The banks’ net interest income (NII) also saw varying trends. Central Bank of India’s NII grew by 3.7% to ₹3,283 crore, while Uco Bank’s NII increased by 10% to ₹2,533 crore. In contrast, Bank of India’s NII reduced by 1% to ₹5,912 crore. Provisions, which are funds set aside for potential loan losses, also declined for Bank of India and Central Bank of India, but increased for Uco Bank.
In terms of loan and deposit growth, all three banks saw loan growth outpacing deposit growth. Uco Bank’s loans grew by 10.8% to ₹3.05 lakh crore, while deposits grew by 16.5% to ₹2.3 lakh crore. Bank of India’s loans grew by 14% to ₹7.1 lakh crore, while deposits grew by 10% to ₹8.5 lakh crore. Central Bank of India’s loans grew by 16.03% to ₹2.9 lakh crore, while deposits grew by 13.4% to ₹4.5 lakh crore. Overall, the banks’ performance suggests a positive trend, with higher interest income and lower provisions contributing to increased profitability.