Financial Daily from THE HINDU group of publications
Friday, Jun 21, 2002
Public Sector Banks
Money & Banking - Public Sector Banks
Corporate Results - Public Sector Banks
SBI net rises 52% to Rs 2,432 cr Dividend hiked to 60 pc
KOLKATA, June 20
STATE Bank of India has recorded a net profit of Rs 2,431.62 crore in 2001-02, marking a growth of 51.57 per cent compared to Rs 1,604.25 crore in 2000-01. The bank has increased its dividend to 60 per cent from 50 per cent.
The operating profit of the bank rose to Rs 6,044.83 crore against Rs 3,966.78 crore in 2000-01, registering a growth of 52.39 per cent.
Addressing a press conference here on Thursday, Mr Janki Ballabh, Chairman, said that the increase in net profit was due to an increase in net interest income of 8.33 per cent. Other income of the bank increased by 7.5 per cent. SBI also reduced its operating expenses by 14.1 per cent.
"Moreover, we made a net gain of 0.5 per cent on the falling interest rates in deposits. In absolute terms, it was Rs 2,600 crore, but the rate of lending also fell by 400 basis points. The net effect was Rs 300-400 crore, which translates to 0.5 per cent," Mr Ballabh explained.
He, further, said that the bank's profits were depressed both in 2000-01 and in 2001-02 owing to expenses on account of voluntary retirement schemes and India Millennium Deposits. It wrote off the deferred revenue expenses relating to VRS on a pro-rata basis.
Moreover, the bank made provisions for investment depreciation, which includes amortisation of premium on `held to maturity' category. Further, as per the RBI guidelines, the appreciation in the `held for trading' category of investments was not recognised by the bank during the current year's accounts.
``On a fully comparable basis, the adjusted net profit of 2001-02 would have been Rs 2,841.76 crore and in 2000-01 it would have been Rs 2,160.48 crore. Hence, the effective point-to-point growth in net profit in 2001-02 would have been only 31.53 per cent'', he explained.
For the current financial year, SBI has targeted a 25 per cent increase in net profit. And, the expected net profit of the bank during 2002-03 may thus be a little over Rs 3,000 crore.
Mr Ballabh also pointed out that the increase in the net profit was not due to an increase in the trading operations. According to him, SBI registered a profit of Rs 352 crore from the sale of investments (mostly Government bonds). Last year, the profit from this operation was Rs 342 crore. Net yield from treasury operations were 10.06 per cent against 10.09 per cent in 2000-01.
He said that SBI had stressed on the management of NPAs. The absolute level of gross NPAs of the bank had come down to Rs 15,485.87 crore in 2001-02, against Rs 15,874.97 crore in 2000-01. The gross and net NPA levels had come down from 12.93 per cent and 6.03 per cent to 11.95 per cent and 5.63 per cent in 2001-02 respectively.
The domestic deposits of the bank increased by Rs 27,738 crore (14.51 per cent) in 2001-02. The average growth of deposits was, however, at 15.87 per cent. The bank concentrated more on the personal segment and so deposits in this segment recorded a growth of Rs 19,868 crore (18.4 per cent) and it formed 60.44 per cent of the aggregate deposits as against 57.82 per cent in 2000-01.
The personal and retail business of the bank's advances registered an enormous growth. Housing finance was the leader in this segment. It grew by 99 per cent to Rs 5,811 crore, against Rs 2,920 crore in 2000-01. Mr Ballabh said that housing loans were expected to grow by Rs 4,500 crore in 2002-03.
The total domestic loan portfolio of the bank increased by 8.35 per cent to reach Rs 1,07,530 crore. The average rate of growth of advances was 8.33 per cent.
At the end of 2001-02, the bank's capital adequacy ratio (CAR) was 13.35 per cent. It comprised 9.22 per cent in Tier I and 4.13 per cent in Tier II. In 2000-01, the bank's CAR was 12.79 per cent.
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