Finstreet | Banking sector achieves record profits in FY24

During FY 2023-24, the banking sector in India recorded robust profitability of ₹3.2 lakh crore, marking a nearly 14% YoY increase. \r

PSU banks saw an 8% YoY profit growth, while private banks, including the impact of HDFC's merger with HDFC Bank, grew over 19%. Improved asset quality and lower credit costs contributed to the sector's strong performance, with PSU banks showing significant growth in net interest income and operating profits in Q4FY24. \r

However, some private banks faced challenges, with a few recording declines in PAT and slippages. Looking ahead to FY25, analysts anticipate moderated loan growth and potential pressure on net interest margins, influenced by high deposit rates and evolving credit risks in microfinance and unsecured loans sectors.