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Paul Noronha

Mr O. P. Bhatt, Chairman, State Bank of India, at a press conference in Mumbai on Saturday. —

Our Bureau

Mumbai, Oct. 31 A robust jump in non-interest income helped State Bank of India post a net profit of Rs 2,490 crore in the second quarter ended September 30, 2009, up 10 per cent compared with Rs 2,260 crore in the corresponding period last year.

Non-interest income rose 50.45 per cent. Net interest income was up marginally by 2.81 per cent.

Mr O. P. Bhatt, Chairman, said that but for the liquidity overhang of Rs 50,000-60,000 crore, higher overhead costs incurred for setting up 550 branches and 3,000 ATMs and wage settlement expenses, the profit would have been higher.

Total income rose 19 per cent to Rs 21,301 crore (Rs 17,910 crore in Q2FY09).

Total expenditure increased by 20 per cent to Rs 16,466 crore (Rs 13,716 crore).

The figures of the current period include that of the erstwhile State Bank of Saurashtra, which was merged with SBI in August 2008. Hence, the figures of the previous period are not strictly comparable.

In the first six months of FY2010, India’s biggest bank logged a 24 per cent increase in net profit at Rs 4,820 crore vis-À-vis Rs 3,900 crore in the corresponding half last year.

As of September-end 2009, total deposits increased by 25.16 per cent to Rs 7,72,904 crore (Rs 6,17,524 crore as of September-end 2008) and advances were up 16.39 per cent to Rs 5,80,237 crore (Rs 4,98,513 crore).

“Credit growth was flat till June. However, post June, growth has picked up. In October, credit offtake has been very high. If this growth rate continues we should achieve 22 per cent growth in this financial year,” Mr Bhatt said.

The SBI chief underscored the fact that the bank had a strong pipeline of unavailed credit sanctions aggregating Rs 25,000 crore.

Further, loans proposals aggregating Rs 25,000 crore awaiting sanctions.

Pointing out that the bank was growing its savings bank deposit base at the rate of Rs 5,000 crore a month in the last few months, Mr Bhatt said robust growth in low-cost deposits and shedding high-cost term deposits (the bank shed term deposits aggregating Rs 44,000 in H1FY10) would improve net interest margin by 10-15 basis points in every quarter.

In Q2FY10, the bank’s gross non-performing assets increased by Rs 2,058 crore (Rs 1,018 crore in Q2FY09). It made loan loss provisions amounting to Rs 997 crore (Rs 911 crore).

On capital raising plans, the SBI chief said that the bank had adequate liquidity and was not looking to raise fund immediately.

However, the bank will raise Rs 36,000-crore in the next five years to maintain a capital adequacy ratio of 12 per cent. The CAR, at present, stands at 14.11 per cent.

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

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