Financial Daily from THE HINDU group of publications
Thursday, Jan 31, 2002
Public Sector Banks
Corporate Results - Public Sector Banks
Money & Banking - Public Sector Banks
SBI net goes up three-fold in Q3
MUMBAI, Jan. 30
STATE Bank of India (SBI) has reported a 178.97-per cent rise in net profit at Rs 613.89 crore for the third quarter ended December 31, 2001 as compared to Rs 220.05 crore in the corresponding previous quarter.
Mr Janki Ballabh, Chairman, SBI, said, "Despite the sluggish credit offtake and the fact that we have not sold any of our investments in the very active Government securities market this year, our profits have been good, based purely on our operations."
The bank's total income for the quarter rose to Rs 8,366.46 crore from Rs 7,262.60 crore. This includes higher income on investments at Rs 3,632.37crore (Rs 2,706 crore).
According to analysts, the sharp rise in profit as compared with the year-ago quarter was because net profit then was low as the bank had to incur huge expense on account of India Millennium Deposits (IMD).
Total expenditure at Rs 6,993.87 crore (Rs 6,138.01 crore) included interest expended at Rs 5,194.42 crore (Rs 4,490.50 crore) and operating expenses at Rs 1,799.45 crore (Rs 1,647.51 crore).
For the nine months, the net profit was higher by 43.81 per cent at Rs 1,815.93 crore as against Rs 1,262.70 crore.
As the results were in line with market expectations, the SBI scrip gained Rs 5 on BSE, closing at Rs 215. Provisions and contingencies fell sharply to Rs 383.27 crore for the third quarter (Rs 820.86 crore). For the nine months, total provisions were at Rs 2,440.76 crore (Rs 2,097.66 crore).
Provision for taxes were higher at Rs 1,129.51 crore (Rs 547.65 crore). Provisions for NPAs were at Rs 1,150 crore (Rs 1,050 crore).
Capital adequacy ratio stood at 13.17 per cent for the third quarter (10.90 per cent).
As on December 31, 2001, the ratio of net NPAs had declined to 5.68 per cent as compared to 6.03 per cent as on March 31, 2001.
According to Mr Ballabh, the bank has set a target of reducing NPAs to below 5.5 per cent as on March 2002 and below the level of five per cent by March 2003.
Compromises approved by the bank under the RBI one-time settlement scheme amounted to Rs 1,059 crore (331 lakh accounts). Cash recoveries made under the scheme up to September 30, 2001 amounted to Rs 633 crore.
Domestic deposits as on December 31, 2001 were at Rs 2,12,032 crore (Rs 1,83,934 crore) and domestic advances (net) stood at Rs 1,00,188 crore (Rs 94,423 crore).
Commenting on credit, Mr Ballabh said, "The top-notch corporates are looking at our investment products, and not our loan products. Commercial paper and NCDs have registered a good growth, with the commercial paper portfolio growing by Rs 2,500 crore to Rs 4,000 crore."
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