Mumbai, Jan. 30: State Bank of India (SBI) has posted a 17 per cent rise in its net profit for the third quarter ended December 31 at Rs 919.44 crore from Rs 787.05 crore in the corresponding period of the previous year.

According to analysts, the lower-than-expected growth in net profit is due to the bank not fully booking profits on its treasury portfolio and rising provisions. During the quarter, other income of State Bank declined to Rs 1121.91 crore from Rs 1361.44 crore in the year-ago period. On the other hand, provisions and contingencies shot up to Rs 707.97 crore (Rs 549.31 crore).

Chairman A. K. Purwar said by the end of this fiscal, he expected an over 20 per cent rise in net profit.

Purwar said with the domestic corporate sector raising alternate resources, credit offtake of the banking sector was affected. However, the trend is set to change next fiscal and a credit growth of around 16 per cent from the present growth rate of 9 per cent is likely. The current fiscal is likely to close with an increase of 12-13 per cent in corporate loans.

On the retail lending front, such loans showed a growth of Rs 5,552 crore in April-December compared with a growth of Rs 4,468 crore in the corresponding period last fiscal. In the thrust area of housing loans, there was a growth of Rs 3,024 crore in the nine-month period compared with a growth of Rs 2,539 crore in same period last year.

While the share of retail lending in SBI’s advances is expected to jump to 30 per cent in the next couple of years, senior bank officials said next to housing loans which showed the highest growth, the bank has witnessed better growth rates in consumer loans.

For the nine-month period, total provisions amounted to Rs 4,379.60 crore (Rs 2899.95 crore). This included provisions for non-performing assets (NPAs) at Rs 2660.32 crore and investment depreciation at Rs 222.57 crore.

Dabhol rating

State Bank has downgraded Dabhol Power Company to sub-standard category of assets from a standard asset in the third quarter even as it expects the project to be restructured in the next couple of months. “Our exposure to Dabhol was Rs 1,300 crore,” deputy managing director and CFO B. G. Sumitra said.

State Bank has so far provided Rs 300 crore towards this asset, which was around 20 per cent against the requirement of 10 per cent according to the norms, he added.

Purwar said, “We expect that Dabhol will be restructured in a couple of months.”