[sbinews] SBI in turbo mode, Q2 net rises 21% - The Economic Times

  • From: rspai@xxxxxxxx
  • To: sbinews@xxxxxxxxxxxxx
  • Date: Fri, 31 Oct 2003 19:53:23 +0500

SBI in turbo mode, Q2 net rises 21% 

MUMBAI: A 697% spurt in treasury profits to Rs 1512.9 crore during the quarter 
ended September ’03 has enabled State Bank of India report a net profit of Rs 
998.7 crore, an increase of 21% over Rs 817 crore in the corresponding quarter 
last financial year. 

This takes the bank’s net profit for the first half to Rs 1889.1 crore, an 
increase of 19.5% over Rs 1,580 crore in the year-ago period. 

The windfall treasury gains would have pushed SBI’s profits higher had not the 
bank increased bad loan provisions almost three-fold to Rs 1,410 crore from Rs 
371.8 crore in the corresponding quarter last year. One reason for the excess 
provisioning is that the government has agreed to waive taxes on the provisions 
banks make for bad loans, out of the profits they earned from the government’s 
gilt-buyback scheme in July `03. Accordingly, SBI has made an additional 
provision of Rs 1010.3 crore out of the profits made by selling government 
securities to the government. 

While lower interest rates and higher levels of treasury investments pushed up 
treasury profits, the same factors also resulted in net interest income 
remaining flat with only a 0.7% growth.  While interest income fell 2.7% to Rs 
7613.9 crore, interest expenses fell 4.2% to Rs 5,198 crore. `Other income’ 
which includes commissions, forex earnings and income under other heads in 
addition to treasury profits rose 133.3% to Rs 2,655 crore largely on account 
of the treasury profits mentioned earlier. 

Average level of advances during the first half was higher by Rs 11,102 crore 
(9.5%), while the average yield on advances declined to 8.4% from 9.4% due to 
declining interest rates. Average resources deployed in treasury operations 
went up by Rs 23,695 crore, recording a growth of 13.1% over the first half of 
the previos year. The average yield on treasury operations was lower at 8.9% as 
compared to 9.7% due to falling rates. However, due to volume growth interest 
income on treasury operations increased 4.8%. Avearge deposits in India 
excluding the Resurgent India Bonds and India Millennium Deposits rose by Rs 
25,404 crore (11.2%). The cost of deposits declined from 6.6% to 5.76%. 
The bank’s non-food advances went up by Rs 3,883 crore uptop the last Friday of 
September `03 from the last Friday of March `03 - an increase of 2.9%. The 
bank’s non-food advances stood at Rs 1,36,279 crore as on September 26, `03. 
Year-on-year growth in non-food advances was 13.2%.  AK Purwar, chairman, SBI 
said that the bank retail loan book has grown by Rs 2,992 crore during the year 
of which Rs 1,703 crore was by way of housing loans. Mr Purwar said the bank 
was planning to computerise 6,913 of its 9,000 branches. 

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