Snapshot

Banking

1
 Though PSU banks are still dominant, its market share has
been coming down.

MARKET SHARES IN TOTAL BUSINESS

2017-18
2011-12

Source: Crisil Research, RBI

2
 Credit growth collapsed between 2015 to 2017 but picking up
in the last couple of years.

CREDIT GROWTH
CREDIT GROWTH FOR
OVERALL CREDIT GROWTH PUBLIC AND PRIVATE
SECTORBANKS

Note: Systemic credit growth will include bank credit, NBFC credit,
corporate bonds
Source: SEBI, RBI, NBFCs, Banks, CRISIL Research
 Deposit growth has moderately increased in the last 2 years
due to lower inflation.

DEPOSIT GROWTH

Consumer Price Index

Source: Reserve Bank of India (RBI), CRISIL Research

4
 NPA sharply increased in FY 16 and continue to rise till FY 18
before softening marginally in FY 19

NPA Trends

Source:
5
Source Company Reports, RBI and Crisil Research
 PSU Bank’s NPAS since 2016 has been almost 3 times that of Private
Bank’s NPAS.

NPA TRENDS: PRIVATE VS PUBLIC SECTOR

Source: Source Company Reports, RBI and Crisil Research

6
How the net profitability margin for the bank is calculates?

= Spreads– Operating expenses +Core fee income

TURN-AROUND OF THE BANKS

• Private banks were making consistent profits but PSU banks posted huge
losses for the last 2 to 3 years.
• Due to IBC and improvement in Asset Quality, PSU banks have started to
turnaround in 2019.
• Analysts expect most of the PSU banks to return to profitability during the
current financial year 2019-20 (FY20), backed by improvement in the balance
sheet.