The Hindu Business Line : Flat growth in SBI net profit in Q3

STATE Bank of India, the largest bank in the country, reported a marginal increase in net profit at Rs 1,115.19 crore for the quarter ended December 31, 2005, as against Rs 1,099.35 crore in the year ago quarter.

The results would have been better but for the additional wage cost and the increase in deposit cost in the quarter, said a bank official.

Total income during the quarter increased to Rs 11,398.62 crore from Rs 10,267.07 crore.

Other income, which also included the Rs 531.54 crore on exchange rate gain on IMD, fell to Rs 1,840.47 crore from Rs 2,238 crore due to the sharp fall in income from sale of investments. The profit on sale of investments was Rs 138 crore (Rs 955 crore). The bank had to pay Rs 312.87 crore as arrears on last year's salary.

"The overall performance of the bank is quite healthy but the increase in net profit for the quarter was constrained by certain factors such as one-time payment and provisions and higher deposit cost," said the bank official.

According to the bank, staff cost increased by 22.56 per cent mainly due to wage revision and higher contribution to pension fund.

However, an analyst with a braking firm said the IMD redemption would have also affected the bank's interest income.

The bank has received an income tax refund of Rs 953.85 crore, which forms part of its interest income. Net interest income was higher at Rs 4,219.88 crore (Rs 3,600.08 crore).

Total expenditure increased to Rs 8,798.97 crore (Rs 6,877.1 crore). Operating profits fell to Rs 2,599.65 crore (Rs 3,389.97 crore).

Total provisions and contingencies for the quarter stood at Rs 1484.46 crore as against Rs 2,290.62 crore in the corresponding period of the previous year.

The Capital Adequacy Ratio was 12.49 per cent (12.66 per cent).

The proportion of Net NPAs to total assets was 0.92 per cent (1 per cent).

For the nine-month period April-December 2005, SBI posted net profit of Rs 3,553.38 crore (Rs 3,239.38 crore). Net interest income was Rs 12,081.07 crore (Rs 9,993.97 crore). Other income was Rs 31,997.51 crore (Rs 29,209.75 crore).

The bank's advances grew to Rs 2,48,598 crore at the end of December 2005, from Rs 1,95,731 crore in the same period last year. Yield on advances improved to 7.87 per cent (7.75 per cent).

Total deposits fell to Rs 3,63,731 crore (Rs 3,50,630 crore), due to payment of IMD amounting to Rs 25,641 crore. Cost of deposits declined from to 4.52 per cent (4.74 per cent).

The bank's retail advances grew by Rs 9,842 crore in the period April-December 2005 and contributed 25.78 per cent of total domestic advances.

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