SBI net profit grows 12%

The State Bank of India's (SBI) net profit in the second quarter ending September rose 12.34 per cent year-on-year to Rs 1,215.36 crore, despite provisions and contingencies at Rs 767.56 crore being 50 per cent lower than what they were in the second quarter of 2004-05.

The total income of the country's largest bank in the second quarter of 2005-06 rose marginally to Rs 9,856.04 crore from Rs 9,737.43 crore a year earlier.

The SBI stock fell 6.08 per cent to Rs 830.95 on the National Stock Exchange.

The bank's employee costs also rose in the second quarter. Payments and provisions for payments for employees in the second quarter of 2005-06 went up 23 per cent to Rs 2,041.18 crore from Rs 1,657.42 crore a year earlier. SBI Chairman AK Purwar said the rise in employee cost was sharper as the provisions for a wage revision were made for the two quarters of 2005-06.

Speaking at a conference of analysts here, Purwar said the bank was awaiting clarification on writeback of provisions made for its Rs 1,500 crore exposure to the now-defunct Dabhol Power Company.

The SBI had made provisions of 35 per cent of the total exposure, amounting to about Rs 525 crore.

The net profit in the six months ended September 30, 2005 increased by 13.92 per cent to Rs 2,438.19 crore from Rs 2,140.29 crore a year earlier.

The net interest income of the bank went up by 24.11 per cent to Rs 7,861.19 crore in the first half of the current financial year, from Rs 6,333.89 crore in the corresponding period of 2004-05. Its net interest margin (NIM) improved to 3.44 per cent in the first half of 2005-06 from 3.15 per cent a year earlier.

The SBI said its deposits grew by 12.55 per cent to Rs 3,80,052 crore at the end of September 2005 from Rs 3,37,684 crore recorded a year ago. The cost of deposit, excluding India millennium deposits (IMDs), declined to 4.77 per cent at the end of September 2005 from 5.31 per cent a year earlier.

The SBI reported a 31.16 per cent growth in advances to Rs 2,38,351 crore from Rs 1,81,721 crore at the end of September 2004. The average yield on advances was 7.81 per cent against 7.78 per cent at the end of September 2004.

During April-September 2005, the SBI's retail advances grew by Rs 5,757 crore. Outstanding personal segment advances stood at Rs 52, 208 crore at the end of September 2005. Housing sector advances also showed a buoyant growth.

Housing loans grew by Rs 3,361 crore, taking the total outstanding at the end of September 2005 to Rs 28,341 crore.