The cumulative profit of public sector banks (PSBs) has crossed the Rs 1 lakh crore-mark in the financial year ended March 2023.

State Bank of India (SBI) accounts for nearly half of the total earnings with an annual profit of Rs 50,232 crore in 2022-23, up 59% over the year-ago period.

The profit of the PSBs has touched Rs 1,04,649 crore in 2022-23, turning around from a total net loss of Rs 85,390 crore in 2017-18. 

The 12 PSBs saw a 57% jump in total profit in FY23 compared to Rs 66,539.98 crore earned in FY22, according to an analysis by news agency PTI.

In percentage terms, Pune-based Bank of Maharashtra (BoM) had the highest net profit growth with 126% to Rs 2,602 crore, followed by UCO Bank with 100% rise to Rs 1,862 crore and Bank of Baroda with 94% increase to Rs 14,110 crore.

Except for the Punjab National Bank (PNB), other PSBs have reported impressive annual increases in their profit after tax.

Delhi-headquarter PNB posted a 27% decline in annual net profit to Rs 2,507 crore in FY23, from Rs 3,457 crore in 2021-22.

The PSBs which reported an annual profit in excess of Rs 10,000 crore are Bank of Baroda (Rs 14,110 crore) and Canara Bank (Rs 10,604 crore).

Other lenders like Punjab and Sind Bank posted an annual profit growth 26% (Rs 1,313 crore), Central Bank of India 51% (Rs 1,582 crore), Indian Overseas Bank 23% (Rs 2,099 crore), Bank of India 18% (Rs 4,023 crore), Indian Bank 34% (Rs 5,282 crore) and Union Bank of India 61% (Rs 8,433 crore).

PSB is a turnaround story from record losses to record profit, PTI reported. The doom-to-bloom story of the public sector banking industry can be attributed to the initiatives and spate of reforms undertaken by the government led by Prime Minister Narendra Modi, along with former finance minister Arun Jaitley and financial services secretary Rajiv Kumar and his successors.

The government has implemented a comprehensive 4R strategy: Recognising NPAs transparently, Resolution and recovery, Recapitalising PSBs, and Reforms in the financial ecosystem.

As part of the strategy, the government infused an unprecedented Rs 3,10,997 crore to recapitalise PSBs during the last five financial years -- from 2016-17 to 2020-21. The recapitalisation programme provided much-needed support to the PSBs and prevented the possibility of any default on their part, PTI reported.

The reforms undertaken by the government over the last eight years addressed credit discipline, ensured responsible lending and improved governance. Besides, there was adoption of technology, amalgamation of banks, and general confidence of bankers was maintained.

In the latest March quarter or the fourth quarter of 2022-23, the PSBs' profit cumulatively increased more than 95% to Rs 34,483 crore. In the year-ago period, the same was at Rs 17,666 crore.

Analysts said that higher interest income and improvement in management of non-performing assets (NPAs) or bad loans are among the key reasons for the improved profitability of the banks.