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Mr O. P. Bhatt, Chairman, State Bank of India, at the press conference in the Capital. – Kamal Narang

Our Bureau

New Delhi, Oct. 28 State Bank of India expects interest rates to soften in the coming months. “Interest rates have peaked. You could see some moderation in the coming months,” the SBI Chairman, Mr O.P. Bhatt, told reporters here on Monday after announcing an over 40 per cent increase in net profit during the second quarter ended September 2008.

“In this context, interest rates in the short term are likely to be stable, while in medium term they would moderate,” he added.

Asked if the bank intends to cut its lending and deposit rates, he said, at the moment “status quo” will be maintained.

SBI reported a net profit of Rs 2,259.7 crore for the quarter ended September 30, up 40.2 per cent from the Rs 1,611.4 crore clocked during the corresponding quarter of the previous year.

The results for the second quarter include the business of State Bank of Saurashtra, which was merged with SBI in August last.

The bank’s total income grew by 31 per cent to Rs 17,909 crore during the second quarter this fiscal as against Rs 13,658 crore in the same period a year ago.

Consolidated net profit grew 11.5 per cent to Rs 2,458.04 crore (Rs 2,204.56 crore), while the total income rose 26.41 per cent to Rs 27,083.47 crore.

For the six-month period ended September 30, SBI reported a consolidated net profit of Rs 4,138.06 crore against Rs 4,128 crore in the year-ago period. The lower growth in profit was mainly on account of higher provisioning towards bad loans .

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

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