The Hindu Business Line : NPA recovery lifts profit of State Bank of Mysore

Bangalore, Jan. 16 State Bank of Mysore (SBM) reduced its gross non performing assets (NPA) in the third quarter (Q3) of the current financial year (2007-08) by Rs 31 crore on a year-on-year basis.

Speaking to Business Line, SBM’s Chief General Manager, Mr Dilip Mavinkurve, said, “We upgraded some accounts under Corporate Debt Restructuring. Besides, this year we recovered close to Rs 100 crore including some big ticket accounts.”

As a result the bank’s gross non performing assets dropped to 1.83 per cent of the gross advances, down sharply from 2.51 per cent of the corresponding period of the last financial year and 2.87 per cent from Q2 this year.

The recoveries buoyed SBM’s gross profits to Rs 136.15 crore in Q3, a 54 per cent increase over the corresponding period of the last financial year. Net profits grew 25 per cent during the same period to Rs 70.91 crore.

Besides, Mr Mavinkurve said that treasury operations contributed substantially to boosting the bank’s income during the period.

Other income as a result, during the period was Rs 119.crore or a 41-per cent increase over the corresponding period of the last financial year.

A statement from the bank also showed SBM was able to improve its interest income during the period by 37 per cent in Q3 to Rs 608.81 crore.

This was largely on account of the 26 per cent credit growth during the year, as against the industry wide growth of just 21 per cent. SBM’s outstanding advances in Q3 end was Rs 19607 crore.

Mr Mavinkurve said to sustain the credit growth, the bank had completed its Rs 160 crore tier one capital raising in the form of perpetual bonds.

In addition, the bank had also raised Rs 340 crore in the form of bonds as tier two capital. As a result, the bank’s capital-to-risk weighted asset ratio or CRAR was 11.48 per cent.

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