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Public Sector Banks (PSBs) have significantly improved their financial performance in 2023-24, with dividend payments rising by 33% to Rs 27,830 crore. This surge in dividend payouts reflects the improving financial health of these banks. In comparison to the previous financial year (2022-23), where PSBs paid out Rs 20,964 crore, the increase amounts to 32.7%.
Government's Share of Dividend Payouts
Of the total dividend payment of Rs 27,830 crore, approximately 65% (Rs 18,013 crore) went to the government, which holds a significant stake in these banks. The increasing dividend reflects the government's rising returns from PSBs, which are key contributors to the nation's financial system.
Record Profits for Public Sector Banks
The financial year 2023-24 also saw public sector banks posting record profits, with a total net profit of Rs 1.41 lakh crore. This is a substantial increase from the previous year’s profit of Rs 1.05 lakh crore. Notably, the first nine months of 2023-24 saw net profits of Rs 1.29 lakh crore. The State Bank of India (SBI) was a major contributor, accounting for over 40% of the total PSB profits, with a net profit of Rs 61,077 crore, reflecting a 22% growth compared to the previous financial year.
Top Performers: PNB and Other Banks
Punjab National Bank (PNB) achieved the highest percentage growth in net profit among PSBs, recording a remarkable 228% increase to Rs 8,245 crore. Other banks also saw impressive growth, including Union Bank of India, which grew its profits by 62% to Rs 13,649 crore, and Central Bank of India, which reported a 61% increase, reaching Rs 2,549 crore.
Additionally, several other PSBs saw profits rise by over 50%, including Bank of India (57% growth to Rs 6,318 crore), Bank of Maharashtra (56% growth to Rs 4,055 crore), and Indian Bank (53% growth to Rs 8,063 crore).
A New Era for PSBs After Record Losses
After experiencing a historic loss of Rs 85,390 crore in FY 2017-18, public sector banks have made a remarkable recovery. The financial year 2023-24 marks a major milestone for these banks, as they set out to achieve sustained profitability and strengthen their position in the market.
