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Our Bureau

Mumbai, July 26 Despite making a huge provision for marked-to-market losses, State Bank of India reported a 15-per cent increase in first quarter net profit.

The country’s largest bank made a Rs 1,549-crore provision (net of NPA write-back) in the quarter ended June 30, against Rs 159 crore in the same period last year — nearly a ten-fold increase.

The higher MTM provision of Rs 1,656 crore for the quarter includes Rs 784 crore on the securities issued to the government for the rights issue, said a statement from the bank.

Net profit increased to Rs 1,640.79 crore from Rs 1,425.81 crore in the year-ago period. A senior SBI official said that a substantial increase in fee income, robust NPA recovery and write-back of loan loss provision helped the bank to report a higher net profit.

SBI’s core fee income rose 45 per cent to Rs 1,285 crore. Net interest margin reduced to 3.03 per cent against 3.27 per cent. Gross advances were 30 per cent up and deposits grew 25 per cent.

The bank expects a 22-per cent growth in business in the current year. Advances to large corporates increased by 41 per cent and home loans by 17 per cent during the quarter.

The bank has seen a reduction of Rs 2,191 crore in gross non performing assets, which resulted in a write-back of Rs 247 crore in loan loss provisions.

This is against a provision of Rs 506 crore in the same period last year.

While SBI’s credit growth was expected to be around 25 per cent, the bank has shown a 30 per cent jump, which is unusual in the first quarter.

A large amount of this has come from the Tata-Jaguar Land Rover deal, for which SBI was the lead manager.

More Stories on : Financial Performance | Public Sector Banks | State Bank of India

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