SBI profit rises 16% in Q3

Dabhol Power downgraded, bank makes double provisioning than stipulated

State Bank of India (SBI) reported a net profit of Rs 919.44 crore for the third quarter ended December 31, 2003. This reflects a rise of 16 per cent over the corresponding quarter last year.

The bank, however, recorded a fall of 5.6 per cent in its total income to Rs 8,559.34 crore during the quarter largely on account of the 17.59 per cent fall in other income and a 3.47 per cent decrease in interest earnings.

SBI has in the third quarter downgraded Dabhol to sub-standard asset, and has made a 20 per cent provisioning against the Reserve Bank of India (RBI) stipulated 10 per cent provisioning.

Bank has an exposure of Rs 1,377 crore to Dabhol, which SBI chairman A K Purwar said has impacted the non-performing assets (NPAs). SBI has made a provisioning to the tune of about Rs 300 crore towards Dabhol, said the bank's deputy managing director & chief financial officer B D Sumitra.

The total provisions made for fiscal 2004 to date amount to Rs 4,379.6 crore compared with Rs 2,899.95 crore provided for in the corresponding nine months period last year. Provisioning for NPAs was at Rs 2,660.32 crore.

Net NPAs have risen by Rs 3,864 crore, while the bank has gone in for restructured loans to the extent of Rs 200 crore. Purwar added that Rs 3,830 crore worth of loans were also restructured under the corporate debt restructuring (CDR) schemes.

SBI scrip fell by 3.89 per cent to close at Rs 598.05 on the National Stock Exchange (NSE). For the nine month period total income rose by 6.58 per cent to Rs 28,351.56 crore, as other income jumped by 56.5 per cent to Rs 5,529.92 crore, though interest earnings fell marginally by one per cent to Rs 22,821.64 crore.

"If one excludes profit on treasury, other income has increased by about 11 per cent. We took a conscientious decision not to book profits beyond a particular point," said Purwar.

Meanwhile, SBI announced that 100 per cent of its branches as well as those of the group "" aggregating 13,630 branches "" have been fully computerised. Purwar stated that the bank was able to acheive the same eight months prior to the targeted date of September 2004.

SBI has spent over Rs 600 crore in the fiscal towards investment in information technology, which will add huge profits in the years to come, he added.