India's largest bank State Bank of India is also the least efficient among large lenders in the Asia-Pacific in the quarter-ended June, according to analysis by S&P Global Market Intelligence.
SBI's cost-to-income ratio rose 911 basis points year-on-year to 71.06% in the June quarter, global provider of financial information services said in a statement on Thursday. The ratio is a measure of profitability—a higher ratio implies higher costs and lower profitability.
The rise in cost-to-income—operating cost to operating income—of SBI is the most of all banks considered in the analysis. In comparison, HDFC Bank Ltd.'s cost-to-income ratio rose from 35.23% to 40.78%. ICICI Bank Ltd. improved its cost-to-income ratio to 60.01% from 62.45%, the statement said.
Krishnan Sitaraman, senior director and deputy chief ratings officer at S&P Global's subsidiary Crisil Ratings said that non-interest income of a number of banks, including SBI and HDFC Bank, was affected "on account of the mark-to-market impact on their investment book because of interest rates firming up in the first quarter of FY22-23".
In terms of countries, Japanese banks were among the least efficient, as record low rates by Bank of Japan weighed on earnings growth. China's banks, in contrast, remained the most efficient.
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