Kolkata: Taking markets, analysts and investors by huge suprise, country's largest bank SBI today posted nearly 200-time increase in profit at whopping Rs 4,050.27 crore for January-March period -- the highest ever in its history-- on a sharp fall in provisioning for bad loans.
SBI profits had taken a big hit in the same period of 2010-11 at Rs 20.88 crore on account of higher provisioning for bad loans and increased tax outgo.
Terming its performance as "blockbuster" State Bank of India's (SBI) Chairman Pratip Chaudhuri said it is the highest ever quarterly profit for the lender. Its net profit of Rs 11,707.29 crore for the entire fiscal ended March, 2012 is the third highest profit of any corporation in India, he added.
"In the Indian context, this (SBI's annual profit) is to my mind is the third highest profit of any corporation. We have Reliance Industries and ONGC whose profits are in the range of Rs 18,000-20,000 crore," he said.
"... The only other company is TCS, whose profit is something like Rs 10,750 crore, so this Rs 11,000 mark as of now only three companies in India have crossed. I am not aware of result of CIL which I believe should come out today itself, so as of now this is the third highest profit making company."
"We have been able to retain and consolidate the gains on the interest side. The asset quality suffered in the second and third quarters and we have declared a war on non-performing assets (NPAs)," he told reporters here.
The total provisioning for bad loans for the quarter was down to Rs 5,547 crore from Rs 6,059 crore in the comparable period. In the period under review, the loss from sale of equity stood at Rs 26 crore as against Rs 335 crore in the previous corresponding quarter.
Total income rose by 28 percent to Rs 33,959.54 crore in the quarter.
The net interest margin rose to 4.17 percent at the end of March 2012. It projected NIM of 3.75 percent for 2011-12.
Buoyed by the stellar performance, bank shares rose to Rs 1,942, up 5.08 percent on the BSE.
The SBI Board has proposed a dividend of 350 percent, or Rs 35 per share for 2011-12.
"SBI shares gained on the back of strong quarterly results. Even though it looks like a phenomenal growth in its net level this quarter it is not justified to compare net profit year-on-year basis," said Sharmila Joshi, Head Equity, Fairwealth Securities.
Sensex heavyweight SBI came out with its Q4 FY12 results and its strong and better than expected financials enabled the index to further gain some ground and pare its losses,"Rakesh Goyal VP Bonanza Portfolio said.
Chaudhuri said SBI had restructured the accounts of troubled carriers Air India and Kingfisher Airlines. For Kingfisher, the account had been classified as doubtful. Exposure of the bank to Kingfisher was Rs 1,400 crore.
For Air India, Chaudhuri said that loss to the bank would only be in the Net Present Value and not on the principal amount. SBI's exposure to Air India was Rs 1,200 crore.
For the fiscal 2011-12, the total income of the bank during the year rose Rs 1,20,872.90 crore against Rs 97,218.96 crore in 2010-11.
Net interest income during the year rose by 33.10 percent Rs 43,291 crore against Rs 32,526 crore.
Gross advances of the bank rose to Rs 8,93,613 crore at the end of March, 2012 from Rs 7,71,802 crore in the previous fiscal, registering an increase of 15.78 percent.
Following the capital infusion from the government in the last week of March, the capital adequacy ratio of the bank rose to 13.86 percent at the end of March 2012 against 11.98 percent at the end of previous fiscal.
The government infused Rs 7,900 crore to shore up Tier-I capital to over 9 percent. Tier I capital of the bank stood at 9.79 percent at the end of March, 2012. With this, government holding in the bank stood at 62 percent.
Significantly, the gross non-performing assets (NPAs) as a proportion of advances went up to 4.44 percent against 3.28 percent at the end of March last year. Net NPA also rose to 1.82 percent during the year from 1.63 percent.
However, Chaudhuri said that the bank is confident of handling the NPA situation.
On consolidated basis, profit of SBI Group also rose by 44 percent to Rs 15,343.1 crore for the year ended March 31, 2012 compared to Rs 10,684.95 crore a year ago.
During the year, total income of the group increased to Rs 1,77,032.82 crore against Rs 1,47,843.92 crore for the year ended March 31, 2011.
Chaudhuri said that the loan growth target during the current fiscal was 16 to 18 percent.
"Given the position of the mid-corporate and the SME sector, we are not robust on loan growth," he said.
Regarding deposits, he said that SBI was targetting at 20 percent this fiscal, adding that the bank had taken a policy decision not to accept any bulk deposits or certificates of deposits (CDs).
"We will focus more on retail deposits," he said.
First Published: Friday, May 18, 2012, 13:00