Backed by robust growth in net interest income, State Bank of India (SBI) today reported a 13.45 per cent increase in consolidated net profit to Rs 3,806.49 crore for the third quarter ended December 31.

The bank’s consolidated net profit in the third quarter of 2009-10 was Rs 3,354.94 crore.

The bank made a provision of 1,797 crore as compared to Rs 515 crore in same period last year to improve its loan loss coverage ratio. Excluding this, the profit would have been higher, Chairman O P Bhatt said after the board meeting.

The bank’s provision coverage ratio is 64.07 per cent. RBI has given SBI time till September 2010 to reach the 70 per cent level. “The coverage ratio norm is arbitrary. The bank has sought time till March 2012 to reach the 70 per cent level,” he said. If the bank gets more time, the stress on profits in the coming quarters will be much less.

The total income of the country’s largest lender was up by 14.7 per cent to Rs 36,966.87 crore from Rs 32,231.45 crore a year ago. Higher lending rates and control over interest costs pushed up net interest income by 43.28 per cent.

On a standalone basis, SBI’s net profit grew 14 per cent to Rs 2,828.06 crore from Rs 2,479.05 crore in the year-ago period. The total income rose from Rs 21,145.4 crore to Rs 24,726.73 crore. Deposits grew 14.01 per cent to Rs 7,70,985 crore. The share of low-cost current account and saving account deposits was 48.17 per cent at the end of December, up from 42.94 per cent a year ago. The cost of deposits fell 72 basis points to 5.20 per cent.

Advances grew 21.88 per cent to 7,39,971 crore while credit rose about Rs 46,700 crore as borrowings by oil companies went up due rise in crude oil prices.

The bank will have to lend about Rs 55,000 crore in January-April to ensure 20 per cent credit growth for the year. “We may not be able to sustain this pace. The bank can give loans worth only Rs 46,000 crore (in the last quarter) and so growth could be 18-19 per cent,” Bhatt said.

The bank’s gross non-performing assets rose to 3.17 per cent from 3.11 per cent at the end of December 2009.

The bank’s capital adequacy ratio was 13.16 per cent at the end of December 2010.

Bhatt said the bank could float its proposed Rs 20,000 crore rights issue before March only if the proposal was cleared by the government by the first week of February.

source: Business Standard

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