PSBs Transformed To Outperform As There Was Improvement In Core Earnings
This was led by better than expected net interest margin, loan growth and low credit cost, opines Sanjay Das, Banking Trade Union Leader
OPINION PIECE
NIM expansion also improved after two disappointing quarters. ROA was also improved in top 4/ 5 banks.
PSB’s earning continues to look good, led by an improvement across margins, operating profitability, and credit costs. SMA pool remains benign, coupled with limited slippages, would aid in sustained/continuous reduction in credit costs.”
The reason being many, one such is during this period the employees were determined to turn around the ongoing bullish story in the banking space though the market position and the economy was not congenial. Their effort during this period was mentionable. The thumb rule is if the PSU bankers are given to play freely with out the intervention of lot many administrative agencies and bosses they can perform better.
Loan demand, better asset quality, rising margins drove earnings. Credit growth remains broad-based. Growth trends to continue in many banks of which SBI and BOB shown an astounding performance.
Had there been proper man power planning , proper work life balance, proper motivation, proper salary matching with the risk, responsibility, accountability & transferability, proper stringent law for wilful defaulters, pro-employee & unbiased governance there would have been far more better result.
Analysts believe Indian PSBs are now better placed with asset quality gradually healing and relatively better balance sheets.
According to Motilal Oswal Financial Services, “The earnings outlook for PSBs continues to look good, led by an improvement across margins, operating profitability, and credit costs. The SMA pool remains benign, which coupled with limited slippages, would aid in sustained/continuous reduction in credit costs.”
Views expressed here are those of Sanjay Das, Senior Banking Trade Union Leader
