Retail loans boost bank profits

The banking sector witnessed another robust quarter during the period ended June 2007, with their growth in bottom lines rising to a 12-quarter high at 51.80 per cent.

A rise in commercial and retail lending rates, growth in fee-based income and lower provisioning helped banks boost their profits.

The numbers are based on the first quarter results for June 2007 declared by 37 banks (22 PSU and 15 private banks). STRONG QUARTERS (Rs in crore) Quarter ended June % chg 2006 2007 Interest Income 43,569 59,743 37.12 Other Income 5,039 7,173 42.34 Net Interest Income 17,173 19,615 14.22 Interest Expended 26,396 40,128 52.03 Net Profit 4,593 6,972 51.80 Prov & Con 3,363 2,641 -21.47

Interest income of these banks increased 37.12 per cent, while other income was up by 42.3 per cent. Interest cost on borrowings and deposits went up sharply by 52.03 per cent, while provisioning declined by 21.47 per cent. Net interest income (NII) of the overall banking sector rose by 14.22 per cent to Rs 19,614.93 crore fuelled by higher interest on advances. Read more in Business Standard