Profitability of Indian banks to drop sharply

Survey projects 14% growth in after tax profits for FY 2012-13.

This compares to the 23% growth in FY 2011-12, said the Confederation of Indian Industries that commissioned the survey. The association said 15 banks, including five state-owned, took part in the survey.

CII also said it expects a sharp drop in profits because of stricter regulatory requirements such as Basel III and stress assets

For FY 2013-14, however, CII expects profit growth to increase to 21% reflecting increased optimism of banks for a positive change.

The CII survey, "Health of Indian banking sector in current regulatory environment," assessed prevailing market conditions vis-à-vis asset quality, bank capitalization and growth estimates of the banking sector.