[sbinews] SBI Q3 Net Mounts 17% To Rs 919 Cr (Financial Express)

  • From: "Rajendra S. Pai" <rs.pai@xxxxxxxxx>
  • To: <sbinews@xxxxxxxxxxxxx>
  • Date: Sat, 31 Jan 2004 09:14:00 +0530

SBI Q3 Net Mounts 17% To Rs 919 Cr
 (Financial Express)

MUMBAI, JAN 30:  The State bank of India (SBI) has posted a 16.82 per cent
rise in net profit at Rs 919.44 crore for the third quarter ended December
31, 2003, compared to Rs 787.05 reported in same period of the preceding
fiscal. The bank posted a net profit of Rs 2,808.54 crore for the nine
months of the current fiscal, registering a growth of 18.63 per cent.

The growth in net profit was achieved due to increased operating profit,
despite larger provisions made during nine-month period on considerations on
prudence. SBI chairman AK Purwar, said the the net-profit for the whole of
the fiscal may be at 20 per cent.

Total income of the bank in the third quarter of period under review
decreased to Rs 8,559.34 crore (Rs 9,066.92 crore).

Mr Purwar said that net non-performing assets (NPA) of the bank fell to 2.88
per cent and provision for NPAs (58 per cent) is estimated at Rs 2,660.32
crore while total provisions amounted to Rs 4,379.6 crore. Under the SARFASI
Act, notices have been issued in 11,892 cases involving an amount of Rs
4,862 crore, effecting a recovery of Rs 105.48 crore provisions For
investment depreciation is estimated at Rs 222.57 crore. "Even after the
90-day provisioning, the bank's NPA figure would rise only to three per
 cent", he said.

The bank has restructured assets worth of Rs 3,300 crore and in the
corporate debt restructuring (CDR) category, it has restructured Rs 1,200
worth of assets. Retail lending grew by 5,552 crore (Rs 4,468 crore) in the
nine-month period. housing Loans recorded a growth of Rs 3,024 crore up to
December. The retail segment constitutes 19.27 per cent of the total
advances, which would be increased to 30 per cent in next two years. "We
will prefer to stick to our existing model than use the agency channel for
expanding our retail exposure", he said adding that bank's system is much
safe and customer friendly.

The bank has been available to arrest its loss in mobilising deposits and
trying to do the same on the advances front. "We have created the technology
platform in semi-urban and rural areas and business in these areas will
gather volume now", he said.

The bank was looking at self-help groups, contract farming and rural housing
in a big way, he said.

Total advances of the bank will grow by 12-13 per cent as against the target
of 16 per cent in the current fiscal, said Mr Purwar adding that this would
be achieved in the fourth quarter.

The bank has a small exposure of in equity and has no interest to increase
its equity exposure. Mr Purwar also said that the bank will go for a small
token securitisation programme. "We are not interested in large scale
securitisation programme as we are flushed with funds", he said.

On government's package to the Food Corporation of India, he said "it would
have some impact but there were a lot of infrastructure projects lined up
for funds, including several from power sector and we expect to have
Financial closures for some of them".

Referring to the interest rate scenario, he said it should remain stable in
immediate term taking into account the inflation and hardening of rates

On the information technology front, Mr Purwar said all the 13,613 branches
of SBI and its seven associates have achieved computerisation, almost eight
months ahead of schedule. The bank has also invested over Rs 600 crore on
initiatives in the current fiscal and has commenced testing of core-banking
solution in 30 branches. From July one, SBI would start massive rollout of
this solution.

The other income of the bank grew by 56.48 per cent and profit on sale of
investment increased by 220.42 per cent and other income (other than profit
on sale of investment) increased by 11.32 per cent. The cost of the deposit
witnessed a decline from 6.6 per cent in nine months period to 5.65 per cent

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