Headline

Business of SCB's registered a healthy growth from 2005-06 to 2010-11

Published On

Jun 01, 2012

Abstract
The business of all scheduled commercial banks (SCBs) grew at a CAGR of 22 per cent, from Rs 36,810 billion in 2005-06 to Rs 99,151 billion in 2010-11. Public sector banks, which includes State Bank of India (SBI) and associates and Nationalised banks, have been the major driver behind the overall growth of SCBs business for the past five years registering a CAGR of 24.5 per cent.

Key Issues
- What has been the growth in banking business in the past for all SCBs and across player-groups? -

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No part of this Report may be published/reproduced/distributed in any form without CRISILs prior written approval.

Bank group-wise performance

The business of all scheduled commercial banks (SCBs) grew at a CAGR of around 22 per cent, from Rs 36,810 billion in 2005-06 to Rs 99,151 billion in 2010-11. Public sector banks, which includes State Bank of India (SBI) and associates and Nationalised banks continued to remain major driver behind the overall growth of SCBs business constituting around 77 per cent share in total business in 2010-11. Investments of the banking sector in Government securities held in India recorded lower growth in 2010-11 as compared with the previous year in tune with the reduction in SLR requirements from 25 per cent to 24 per cent with effect from December 18, 2010.

Public sector banks

The business of public sector banks grew at a CAGR of 23 per cent from Rs 27,286 billion in 2005-06 to Rs 76,786 billion in 2010-11, driven by a CAGR of 24 per cent in advances and 22 per cent in deposits during the same period. The share of advances in funds deployed remained almost flat at 62.4 per cent in 2010-11 (62.8 per cent in 2009-10), while the proportion of investments in funds deployed declined to 25 per cent in 2010-11 from around 28 per cent in 2009-10, due to the accommodation of higher credit growth.

Private sector banks

The business of private sector banks grew at a CAGR of 19.4 per cent, from Rs 7,411 billion in 2005-06 to Rs 18,003 billion in 2010-11, driven by a CAGR of 21 per cent in advances and 18.5 per cent growth in deposits for the same period. The share of advances in funds deployed increased to 59.6 per cent in 2010-11 from 57.4 per cent in 2009-10, while the share of investments in funds deployed declined marginally to 31.6 per cent in 2010-11 from 32.2 per cent in 2009-10. The segment stood second in terms of the share in total business at 18 per cent in 2010-11.

Foreign banks
The business of foreign banks grew at a CAGR of 15.6 per cent over the past five years, the lowest amongst all bank groups, from Rs 2,113 billion in 2005-06 to Rs 4,362 billion in 2010-11, driven by a CAGR growth of 16.2 per cent in deposits between 2005-06 and 2010-11. Advances grew at a CAGR of 15 per cent during the same period. The group had the lowest share of around 4 per cent in the total business of SCBs in 2010-11.

Share of bank groups in SCBs - Total business 2005-06

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No part of this Report may be published/reproduced/distributed in any form without CRISILs prior written approval.

2010-11

Source: CRISIL Research and RBI

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No part of this Report may be published/reproduced/distributed in any form without CRISILs prior written approval.

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