Mumbai: State Bank of Mysore (SBM) on Monday reported a 35 percent decline in its March quarter net profit to Rs 76 crore due rise in provisioning for bad assets.
The bank, an associate of the country's largest lender State Bank of India, had posted a net profit of Rs 116 crore in the same quarter a year ago.
The dip in the net profit came even as the operating profit moved up by a healthy 35 percent to Rs 354 crore, up from Rs 263 crore a year ago. The core net interest income was up 16 percent to Rs 486 crore.
Managing Director Sharad Sharma attributed the fall in the bottom-line to the jump in the provisioning, which nearly doubled to Rs 278 crore from Rs 147 crore a year ago.
He said the gross non-performing assets ratio has also moved up to 4.53 percent from the year ago's 3.70 percent on the back of stress in corporate accounts from commodity trading and food processing sectors and the agri book.
The net interest margin also narrowed to 3.22 percent for the quarter from 3.37 percent because of a cut in the base rate, Sharma said.
However, the market reacted positively and bank scrip closed 1.26 percent higher at Rs 570.15 on the BSE, whose 30-share benchmark closed the session with gains of 0.52 percent.
Sharma hinted at a qualified institutional placement of shares to comply with market regulator Sebi's order of having 10 percent public shareholding in listed government entities by this August.
SBI, which is the largest shareholder of the bank, currently commands over 92 percent of the holding. A senior bank official said an infusion of up to Rs 75 crore will be required to adhere to the Sebi regulations.
When asked about parent SBI's plan to merge one of the five associates with itself during the fiscal, Sharma said such a thing is possible if the government so decides.
First Published: Monday, April 29, 2013, 20:25