The State Bank is expected to post a net profit of over Rs 2400 crore in fiscal 2002 against Rs 1604 crore in 2001. The bank's board is meeting in Kolkata on June 20 to finalise the audited accounts for the year. It's fourth quarter net may be pegged at over Rs 600 crore.
In the first nine months of the year, the bank posted a net profit of Rs 1,815.93 crore which is 43.81 per cent higher than the Rs 1,262.70 crore net recorded in the first three quarters of 2001.
But for the higher provisioning on account of non-performing assets (NPAs) and taxes, the bank's net profit would have crossed Rs 2,500 crore, analysts said.
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In the first three quarters, the bank had made provisioning worth Rs 1,129.51 crore for the NPAs.
For the entire year, the bank is expected to make over Rs 1,700 crore provisioning on account of NPAs. Consequently, the net NPA level will go down to around 5.66 per cent from Rs 6.92 per cent in the previous year. The gross NPA too is expected to be pared to around 12.61 per cent from 14.33 per cent. In absolute term, the gross NPA may come down from Rs 15,473 crore to Rs 14,800 crore, analysts said.
The bank recovered Rs 4,869 crore worth of sticky assets in 2002, much higher than the Rs 3,415 crore recovered in 2001.
The bank's domestic deposits during the year grew by 12.99 per cent to Rs 2,65,400 crore (against 25.19 per cent the previous year including the India Millennium Deposits) while the growth in domestic advances was more sedate at 9.29 per cent to Rs 1,18,984 crore (against 15.03 per cent).
With lending rates moving southwards and yield on government bonds shrinking, the net spread of the bank is expected to come down by at least 40 basis points from 3.02 per cent to 2.62 per cent. The average cost of funds came down by a fraction -- from 6.5 per cent in 2001 to 6.48 per cent in 2002 -- while the average yield on funds deployed came down by from 9.52 per cent to 9.10 per cent.
The bank is expected to charge Rs 355 crore to the profit and loss (P&L) account out of the Rs 2,272 crore cost of the voluntary retirement scheme (VRS) implemented in 2001. In 2001, it charged Rs 853 crore to the P&L account. With Rs 355 crore being charged to the P&L account in 2002, the deferred revenue expenditure on account of VRS would now be pegged at Rs 1,064 crore.
With the staff strength coming down by 8.9 per cent following the successful implementation of the VRS in 2001 (from 2,33,433 to 2,09,146), the business per employee jumped from Rs 1.37 crore to Rs 1.90 crore.
The capital adequacy ratio (CAR) of the bank is expected to remain unchanged at around 12.80 per cent.