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
"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
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
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.