TT Epaper
The Telegraph
TT Photogallery
 
IN TODAY'S PAPER
WEEKLY FEATURES
CITIES AND REGIONS
ARCHIVES
Since 1st March, 1999
 
THE TELEGRAPH
 
 
CIMA Gallary
Email This Page
State Bank profits disappoint

Mumbai, Nov. 8: The State Bank of India (SBI) today failed to meet earnings forecast with its second-quarter net profit rising marginally to Rs 2,501.37 crore from Rs 2,490.04 crore in the year-ago period because of higher provisioning.

Analysts had projected the country’s largest lender to report a net profit in the range of Rs 2,700-3,000 crore.

SBI chairman .P. Bhatt said the bank would raise provisions every quarter by 2-3 per cent to fulfill RBI criteria. He said provisions were lower because the bank’s asset quality was good.

While treasury revenues slipped, provisions climbed to Rs 2,621.47 crore from Rs 1,016.07 crore in the corresponding period last year. Of this, provisions for non-performing assets (NPAs) grew to Rs 2,162.48 crore during the quarter from Rs 1,102.29 crore.

The SBI, however, said it had performed well on some key fronts. For instance, its net interest income (NII) is at an all-time high. NII is the difference between interest earned and interest paid. During the quarter, NII grew to Rs 8,114.87 crore on higher advances against Rs 5,608.82 crore in the corresponding period last year, a rise of nearly 45 per cent.

Interest expense on deposits decreased 6.51 per cent against a growth of 30.11 per cent during the same period last year as the bank shed high-cost bulk deposits, while raising more low-cost CASA (current and savings account) deposits. Interest income on advances increased 15 per cent during the quarter.

Fee income also showed a sharp rise, growing 40 per cent in the quarter, spurred by the cross-selling of products.

However, staff costs pushed up operating expenses. Besides a higher provision of Rs 547.34 crore for pension and gratuity, payment to employees surged Rs 494.31 crore because of a rise in dearness allowance and leave encashments.

Another sore factor is the slippage in restructured accounts of around Rs 661 crore. SBI chairman .P. Bhatt said more restructured accounts could slip in the next quarter.

Gross advances rose to Rs 6,93,224 crore till September 2010 from Rs 5,80,237 crore till September 2009, a growth of 19.47 per cent. Deposits went up to Rs 8,55,345 crore from Rs 7,72,904 crore.

Top
Email This Page
 
 
" "