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Wednesday, Jul 28, 2004

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SBI first quarter net up 17.55 pc

Our Bureau

Mumbai, July, 27

STATE Bank of India has recorded a 17.55 per cent growth in net-profit for the first quarter ended June 30, 2004, at Rs 1,058.40 crore as against a net profit of Rs 900.36 crore in the corresponding period in the previous year.

However, the bank's shares fell by 5.8 per cent in the bourses on Tuesday on weak sentiment over the bank's disclosure to stock exchanges, that it had changed its accounting norms for investment in accordance with RBI guidelines. Had it not been for this change, the bank would have made a lower profit by Rs 2,242.76 crore, said an analyst.

SBI's shares closed at Rs 442.30 at the BSE from Rs 469.55.

The banks statement to the exchange said, "In line with the guidelines prescribed by RBI and being followed by all other banks domestically, the basis of valuation of investments in AFS and HFT categories has been changed during the current year, wherein investments are valued after netting off classification-wise depreciation and appreciation, computed scrip-wise, and providing for net depreciation in each classification while ignoring net appreciation."

"The earlier system, discontinued with effect from April 1, 2004, was to provide depreciation scrip-wise while ignoring appreciation. Had the earlier system been continued, provision would have been higher by Rs 2,242.76 crore and profit before tax would have been lower by the same amount."

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