The decline in net profit is attributed to a rise in overall expenses of the bank, which were up 28 per cent to Rs 3,563.10 crore, while total income grew by 17.3 per cent to Rs 4,502.27 crore.Other income rose by 14 per cent to Rs 714.27 crore during the quarter.
The fall in profits is also due to a decline in net interest income by 12.8 per cent to Rs 922 crore during the fourth quarter. This was reflected in the net interest margin dropping to 2.42 per cent compared to 3.15 per cent in the same period last year.
This is due to higher cost of deposits which went up to 6.80 per cent compared to 6.05 per cent in the fourth quarter of the previous financial year. The return on assets of the bank also declined to 1.09 per cent compared to 1.40 per cent in the same quarter last year.
"We expect net interest margins to go up by 40-50 basis points during the current financial year," Chairman and Managing Director M B N Rao said. It has made a provision of Rs 980 crore towards employee benefits as per revised Accounting Standard-15, Rao said.
Return on assets of the bank also declined to 1.09 per cent (1.40 per cent).The bank has made a lower provision of Rs 375.11 crore (Rs 497.03 crore). For the year ended March 31, 2008, the bank reported 10.14 per cent rise in net profit at Rs 1,565 crore.
Total income for the year went up by 28.1 per cent to Rs 16,414 crore. Sustaining the core earnings growth, the bank's interest income recorded a year on year growth of 25 per cent to Rs 14,200 crore.
The bank's percentage of net non-performing assets during the fourth quarter dropped marginally to 0.84 per cent (0.94 per cent). In absolute terms, the net NPAs stood at Rs 899 crore (Rs 927 crore).
Its capital adequacy ratio during the quarter declined marginally to 13.25 per cent (13.50 per cent). The bank has been certified as Basel-II compliant by the auditors as on April 1.
The board of directors have declared a dividend of 80 per cent for the FY08 amounting to Rs 328 crore.
