SBI Q2 net profit at Rs 3,133 cr
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Last Updated: Saturday, October 31, 2009, 22:33
Mumbai: Bolstered by a healthy growth in net interest income and core fee income, India's largest lender, State Bank of India posted a 10.19 percent jump in its Q2 FY10 net profit at Rs 2,490 crores compared to Rs 2,260 crore a year-back.

The bank saw a credit growth of 16.39 percent in the quarter and is optimistic about achiving a growth of 22 per cent for the full financial year, SBI Chairman, O P Bhatt told reporters here.

"If the growth in credit picks up, we should achieve around 22 percent growth by the end of this fiscal," Bhatt told reporters here.

The bank has adequate liquidity position and was not looking to raise fund in the immediate future, Bhatt said.

However, the bank will have to raise Rs 36,000-crore in the next five years to maintain a capital adequacy ratio of 12 percent. CAR, at present, stands at 14.11 percent.

SBI will have to make an additional Rs 5,000-crore provisioning on bad loans after Reserve Bank directed banks to increase the loan loss coverage ratio to 70 percent, in its quarterly monetary policy review, Bhatt said.

"We have to provide upto Rs 5,000-crore (to reach 70 percent coverage)," Bhatt said.

Bhatt said that the Reserve Bank may possibly review the method to reach the 70 percent provisioning or may extend the period to two years.

The bank's core fee-income grew to Rs 2,103 crore in Q2FY10, up 58 percent, as against Rs 1,331 crore in the same period last year while interest income jumped by 10.34 per cent.

SBI's total deposits moved up to Rs 7,72,904 crore as of September, 2009, up 25.16 percent from Rs 6,17,524 crore in the same period last year.

Current account and savings accounts (CASA) which gives banks low cost funds contributed 40.96 percent of the deposits against 39.70 percent in the year-ago period, the bank said. The bank expects the CASA proportion to grow further by the fiscal-end, Bhatt said.

SBI's advances grew to 5,80,237-crore, up 16.39 per cent, as compared to Rs 4,98,513-crore in Q2 last fiscal.

Its car loans grew by 44.45 percent in the quarter while large and mid-corporate loans, home loans and education loans grew by 14 percent, 23.40 percent and 42.23 percent respectively.

In a bid to expand its reach in rural ares, SBI plans to open around 6,000 ATMs in the next six months and would also look at expanding branch strength in semi-urban and rural areas, Bhatt said.

SBI's standalone total income stood at Rs 21,301.04 crore in the second quarter against Rs 17,909.64 crore in the same period last fiscal.

The bank's net interest margin, during the quarter, improved to 2.43 percent against 2.30 percent in the same period in last year.

SBI's gross and net NPAs stood at 2.99 percent (2.38 per cent) and 1.73 percent (1.34 percent) respectively for Q2.

The lender saw its retail NPAs emerging mainly from the housing and education loans segments, Bhatt said.

The lender provided a total of Rs 7,449 crore to cover bad loans in the quarter and currently has a coverage ratio of 42.87 percent, Bhatt said.

On a consolidated basis, the net profit of SBI rose to Rs 3,133 crore in the second quarter. It had reported a net profit of Rs 2,458 crore in the same period previous fiscal.

Total income stood at Rs 33,101.65 crore in July- September this year, while it had a total income of Rs 27,083.47 crore in the same period previous fiscal.

Bureau Report

First Published: Saturday, October 31, 2009, 22:33

Tag: SBI
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