From return on assets to employee cost, private banks surpass PSBs

Topics PSB | PSBs | public sector banks

Representative image
The gap in the overall performance between public sector and new-age private banks widened further in FY19. Return on assets and return on equity for the large state-run banks stood at 0.3 per cent and four per cent, respectively, while the same for medium-sized among them were both at negative 1.8 per cent and 31 per cent respectively. In comparison, for new-age private banks, the figures were at 1.1 per cent and 10 per cent.

A similar narrative was seen in the case of the cost to income ratio and net-interest margin, too, wherein state-run banks trailed their new-age rivals. Productivity of employees is another worrying factor — the cost per employee is the highest in large public sector banks and it is growing faster than the revenue per employee; the new private banks have contained cost per employee.



Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel