This study traces the trend of RONW for 22 quoted banks in 1998-99 and 1997-98. Aggregate net worth of 22 banks has increased by 9.2 per cent to Rs 22,527 crore during 1998-99 from the level of Rs 20,629 crore during 1997-98, but their combined net profits have declined significantly by -27.7 per cent resulting in a sharp fall in RONW-lower from 18.38 per cent in 1997-98 to 12.16 per cent in 1998-99.

Of the selected 22 banks, the top five according to the PAT to net worth ratio during 1998-99 are Global Trust Bank (24.41 per cent),HDFC Bank (24.31 per cent), State Bank of B&J (21.91), Bank of Punjab (21.40 per cent) and ICICI Bank (20.55 per cent). But in the year 1997-98, the top five are Global Trust Bank (33.15 per cent), Karur Vysya Bank (27 per cent), State Bank of B&J (26.29 per cent), Bank of Punjab (23.92 per cent) and State Bank of Mysore (23.21 per cent). Three banks namely State Bank of B&J, Global Trust Bank and Bank of Punjab are common in both the list of top five. Though the Global Trust Bank got first rank in both the years list of top five, its net profit declined by -11.6 per cent during 1998-99. But State Bank of B&J maintained its third rank in both the years despite adverse situations and poor credit off-take. Bank placed focussed attention on its treasury business for its bottomline. The net profit of the bank increased to Rs 91.87 crore in the year 1998-99 against Rs 90.47 crore in the previous year, indicating growth of 1.5 per cent.

Among the 22 banks, 15 banks have witnessed a fall in PAT to net worth ratio,while 6 banks have shown a higher ratio in 1998-99 compared with 1997-98. The remaining one made losses during both thr years.

A significant fall in RONW was witnessed in the case of Global Trust Bank (33.15 per cent in 1998-99 to 24.41 per cent in 1997-98), Karur Vysya Bank (27.00 per cent to 19.03 per cent), Bank of Madura (22.32 per cent to 16.98 per cent), State Bank of Mysore (23.21 per cent to 13.85 per cent), State Bank of India (19.37 to 9.88 per cent), Bank of India (15.74 per cent to 8.36 per cent), Vysya Bank (15.46 per cent to 7.18 per cent) and Federal Bank (13.46 per cent to 0.81 per cent).

The State Bank of India posted a net profit of Rs 1,027.8 crore for the year 1998-99 as against Rs 1,861.2 crore in 1997-98, registering a decrease of -44.8 per cent. According to SBI, the profits were adversely affected by the incidence of certain one-time expenses and also by provision for wage hike. Similarly, in the case of Federal Bank, the net profit declined by -95.0 per cent to Rs 2.53 croreduring 1998-99 from the level of Rs 50.28 crore during 1997-98. Its net worth also declined by -16.2 per cent during the year.

A significant improvement in RONW during 1998-99 was noticed in the case of HDFC Bank (22.15 per cent in 1997-98 to 24.31 per cent in 1998-99) and UTI Bank (10.04 per cent to 15.08 per cent). The net profit of UTI Bank increased by 94.0 per cent to Rs 31.08 crore during 1998-99 from the level of Rs 16.02 crore during 1997-98. The net profit growth was highest among the quoted banks during 1998-99.

The top five banks in terms of net worth during the year under study were State Bank of India (Rs 10,402 crore), Bank of Baroda (Rs 2,898 crore), Bank of India (Rs 2,407 crore), Oriental Bank (Rs 1,231 crore) and Corporation Bank (Rs 975 crore). For these banks, PAT as percentage of net worth ranged between 8 per cent and 20 per cent. But none of the above banks figured among the top five in terms of RONW during 1998-99.