Indian banks see RoA, RoE reach decadal highs in FY24: Economic Survey

The return on equity (RoE) and return on assets (RoA) ratios for Indian scheduled banks (SCB) touched decadal highs in March 2024, the Economic Survey for fiscal 2024 showed.

“Profitability indicators remained strong, with return on equity (RoE) and return on assets (RoA) ratios touching decadal highs in March 2024,” the survey showed.

Additionally, it showed that the cost of funds of banks rose by 100 basis points in the year, compared to a 75-basis-point jump in the previous year. “Lagged effects of transmission of monetary policy rate increases and shifts in liquidity conditions led to a 100-basis-point increase in the cost of funds as against the 75 basis points rise in the yield on assets in FY24,” it said.

The survey also showed that the net interest margin (NIM) of SCBs remained robust at 3.6 percent in March 2024. The yield on assets further improved due to the rise in interest rates, it said.