Page 5 - Banking Finance March 2023

BANK UPDATE

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News

Bank of Baroda Q3 result: Payments banks' tech- operational, of which only three man-
aged to become profitable in their
Net profit jumps 75% to Rs driven services 'no longer
operations.
3,853 crore their niche' "Notwithstanding the increase in both
Bank of Baroda has hiked marginal cost Technology-oriented business models of interest and non-interest income, PBs
of funds based lending rate (MCLR) by Payments Banks (PBs) are no longer ended 2021-22 with losses due to high
up to 35 bps across tenors. The rate their niche as almost all banks are le- operating expenses," RBI said.
hike has come effect from January 12. veraging technology to improve and
expand delivery of financial services and
Bank of Baroda on February 3 reported SBI Q3 Results: Net profit
products, as per a RBI report.
a net profit of Rs 3,852.74 crore for the
jumps 68.5% to record Rs
December quarter, a 75 percent year- "These efforts (leveraging technology)
on-year increase that was helped by have received a boost with the estab- 14,205 crore
strong net interest income growth. lishment of digital banking units (DBUs). SBI reported a 68.5 per cent year-on-
Against this backdrop, concerns are year jump in net profit to a record Rs
The public sector lender's interest in-
being raised in some quarters about 14,205.3 crore for the quarter ended
come rose to Rs 2,3540.14 crore from
Rs 17,963 crore a year ago. the viability and sustainability of differ- December 2022, far exceeding ana-
entiated banking models," RBI said in lysts' expectations.
The net interest income rose 26.5 per-
its Report on Trend and Progress of
cent to Rs 10,818 crore for the three The PSU banking major's net interest
Banking in India 2021-22.
months ended December. This comes income (NII) - or the difference be-
on the back of a robust loan growth of The central bank said it needs to be tween interest earned and interest
19.7 percent and an improvement in ensured that business models of PBs paid - increased 24.1 per cent on a
net interest margins as well. are sufficiently robust and good gover- year-on-year basis to Rs 38,068.6
nance and technological standards are crore, according to a regulatory filing.
Provisions declined 4 percent to Rs
adhered to so that they survive in a
2,403.93 crore for the quarter ended State Bank of India's net interest mar-
competitive environment.
December 31, 2022. In the same pe- gin - a key measure of profitability for
riod of the previous year, the bank's PBs were set up as niche entities to lenders - improved by 14 basis points
provisions totaled Rs 2507 crore. facilitate small savings and to provide on a quarter-on-quarter basis to 3.69
payments and remittance services to per cent, according to a company
Together with healthy NII growth and
migrant labour, low-income house- statement.
modest provisions, the bank's operat-
holds, small businesses and other
ing profit surged 50 percent year-on- The bank's asset quality improved, re-
unorganised sector entities.
year to Rs 8,232.19 crore from Rs flected in its gross non-performing as-
5,483.33 crore a year ago. As of end-March 2022, six PBs were sets (NPAs) as a percentage of total

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