Amid stiff competition from private and foreign players, the country's 27 public sector banks logged 35 per cent growth in profit at Rs 16,546 crore (Rs 165.46 billion) while their bad assets fell below 3 per cent during 2003-04.

State Bank of India led the chart with Rs 3,681 crore (Rs 36.81 billion) net profit followed by Canara Bank [Rs 1,338 crore (Rs 13.38 billion)], Punjab National Bank [Rs 1,109 crore (Rs 11.09 billion)], Bank of India [Rs 1,008 crore (Rs 10.08 billion)] and Bank of Baroda [Rs 967 crore (Rs 9.67 billion)].

"The combined net profit of PSBs increased 34.6 per cent during 2003-04 to Rs 16,546 crore (Rs 165.46 billion) compared with a growth of 48 per cent during FY03 and a decline of 15.7 per cent during FY01," ICRA Information, Grading and Research Services (Ingres) said in a report.

The impressive profit growth was despite the high 31.6 per cent growth in provisions and contingencies at Rs 22,928 crore (Rs 229.28 billion) in 2003-04, it said.

SBI and its seven associates constituted almost one-third [Rs 5,619 crore (Rs 56.19 billion)] of the total profits of all PSU banks.

The operating profit of the PSU banks grew by 32.8 per cent to Rs 39,475 crore (Rs 394.75 billion) during the last fiscal, of which SBI and its arms accounted for Rs 14,364 crore (Rs 143.64 billion).

"Provisions for NPAs and taxes increased significantly during 2003-04, reflecting higher operating profits and tightening of prudential norms. Provisions for NPAs increased by 40.5 per cent to Rs 12,682 crore (Rs 126.82 billion) during 2003-04," it said.

The net NPAs as a percentage of net advances declined to 2.89 per cent at Rs 18,141 crore (Rs 181.41 billion) in 2004 from 4.47 per cent [Rs 24,465 crore (Rs 244.65 billion)] in 2003.