[sbinews] SBI in turbo mode, Q2 net rises 21% - The Economic Times
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- Date: Fri, 31 Oct 2003 19:53:23 +0500
SBI in turbo mode, Q2 net rises 21%
TIMES NEWS NETWORK[ FRIDAY, OCTOBER 31, 2003 12:04:09 AM ]
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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