Synopsis
- Scheduled Commercial Banks’ (SCBs) Pre-Provisioning Operating Profit (PPOP) grew by a moderate 2.7% year on-year (y-o-y) to Rs 1.29 lakh crore driven by growth in Net Interest Income (NII), which was offset by higher operating cost (opex). This was despite total income growth of 25.1%.
- The cost-to-income ratio of SCBs surged by 430 bps y-o-y to 50.6% in Q3FY24 due to higher growth in opex (19.8% growth) compared to NII (9.7% growth) this was impacted majorly due to higher employee cost due to revised negotiation for PSB employee.
- Meanwhile, PPOP increased marginally by 1.3% on a sequential basis. However, the PPOP margin shrank by 27 bps from 2.37 % in 3QFY23 to 2.10 % in 3QFY24, as we saw higher employee cost impacted in addition to employee provision cost increase, driven by PSBs.
