Financial Daily from THE HINDU group of publications
Tuesday, Sep 02, 2003
Financial Daily from THE HINDU group of publications Tuesday, Sep 02, 2003 |
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Money & Banking
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Public Sector Banks Core profitability of PSBs has improved: Crisil study Our Bureau
Mumbai , Sept. 1 TREASURY income, falling interest rates and profits from investments have aided public sector banks to maintain the trend of improving core profitability in 2002-03, in addition to the `impressive' overall profitability growth trend, according to Crisil. According to the latest Crisil study, core profitability of public sector banks also showed a distinct improvement in FY 2002-03, and this was driven by widening interest spreads on account of the relatively higher decline in deposit costs vis-à-vis the fall in business yields. While profits on the sale of investments have arisen because of reasons that are extraneous to the banks' core operations and hence, are not a true reflection of their operating performance, the improvement in core profitability clearly reflects an improvement in the operating performance of public sector banks, according to the study. Crisil has evaluated the banks' core profitability by means of their net profitability margin (NPM), which is defined as profit margin before provisions and taxes after excluding the effect of profits on the sale of investments, said a press release.
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