State Bank of India Working Results FY 06-07

HIGHLIGHTS

* Balance sheet size crosses Rs 500000 crores

* Deposits cross Rs 400000 crores

* Advances cross Rs 300000 crores

* Operating Profit Rs 10000 crores; Growth of 21.23%

* Interest Income on loans grows by 40.36%

* Non Interest Income grows by 31.57%

* Operating Expenses grow by 0.84% only

* Share of Non-Interest Income to Operating Income increases from 21.95% in 06 to 26.44% in 07.

* NIM at a healthy 3.31%

* Gross & Net NPA decreases from 3.61% to 2.92% and 1.88% to 1.56% respectively.

* Dividend declared 140% (Rs.14 per share).

YOY 2006-07 Performance

1. Operating Profit of the Bank grew from Rs 8249 crores in 06 to Rs 10000 crores in 07 recording a growth of 21.23%.

2. Interest on loans has grown from Rs 17696 crores to Rs 24839 crores, a growth of 40.36%. The loan Book recorded a growth of Rs.74774 crores.

3. Non-Interest Income has grown from Rs 4385 crores to Rs 5769 crores, a growth of 31.57%. Correspondingly, share of Non-Interest Income to Operating Income grew from 21.95% to 26.44%.

4. Notwithstanding a growth of Rs 55475 crores in deposits, interest expenses on deposits grew marginally from Rs 18132 crores to Rs 19084 crores only, a growth of 5.25% largely due to a healthy CASA ratio of 43.57%.

5. Operating Expenses during the period grew from Rs 11725 crores to Rs 11824 crores, a growth of 0.84% only.

6. Gross NPA ratio declined from 3.61% to 2.92%. Correspondingly, Net NPA ratio declined from 1.88% to 1.56%. However, Rs 1430 crores has been provided for loan losses against Rs 148 crores last year.

7. Provision for Income Tax has been made for Rs 3049 crores as against Rs 2499 crores in 06, an increase of Rs 550 crores.

8. Net Profit at Rs 4541.31 crores is marginally higher than Rs 4406.67 crores recorded in 06 largely due to additional provisions for taxes & loan losses.

Business Highlights:

* Deposits grew to Rs 435521 crores from Rs 380046 crores, a growth of Rs 55475 (14.60%)

* Gross Advances of the Bank have grown to Rs 342232 crores from Rs 267458 crores recording a growth of Rs 74774 crores (27.95%).

* Advances in Retail segment have grown (Y-O-Y) by Rs.12537 crores (i.e.20.53%). The outstanding Retail segment advances aggregate Rs.73596 crores.

* The Bank continues to perform well in housing finance. Housing advances have grown (Y-O-Y) by Rs.5841 crores (i.e.18.18%). The total outstanding of home loans was Rs.37975 crores, constituting 51.60% of Bank's Retail Advances.

* Mid Corporate Group Advances (excluding food) of the Bank grew from Rs 64931 crores in FY 06 to Rs 87462 crores, a growth of Rs 22531 crores equal to 34.70%

* Agricultural advances grew to Rs.34993 crores (Rs 26305 crores), a growth of Rs.8687 crores (33.02%). Disbursements were at Rs. 21625 crores (Rs.17920 crores), a growth of Rs. 3705 crores (20.68 %).

RATIOS:

* Return on Assets has decreased to 0.84% from 0.89%

* Return on Equity has also declined to 14.24% from15.47%

* Cost of Deposits has increased to 4.79% from 4.57%

* Yield on Advances has increased to 8.67% from 7.78%

* Yield on Investments decreased to 6.88% from 7.10%

* NIM of the Bank increased to 3.31% from 2.92%

* Non Interest Income to Operating Income increased to 26.44% from 21.95%

* Cost to Income Ratio has decreased to 54.18% from 58.70%

Comparative Performance for Q4 (07) & Q4 (06):

1) Interest on loans increased to Rs 7057 crores from Rs 4759 crores, a growth of 48.29%.

2) Total Interest Income grew from Rs 8509 crores to Rs 11541 crores, a growth of 35.64%.

3) Interest on Deposits grew from Rs 4196 crores to Rs 5700 crores, a growth of 35.86%.

4) Interest on Investment grew from Rs 3598 crores to Rs 4472 crores, a growth of 24.31%.

5) Net Interest Income grew from Rs 3555 crores to Rs 4320 crores, a growth of 21.54%.

6) Non-Interest Income grew from Rs 2362 crores to Rs 2894 crores, a growth of 22.56%.

7) Operating Income grew from Rs 5916 crores to Rs 7214 crores, a growth of 21.94%.

8) Operating expenses grew from Rs 2954 crores to Rs 3246 crores, a growth of 9.88%.

9) Operating Profit grew from Rs 2962 crores to Rs 3968 crores, a growth of 33.99%.

10)Net Profit grew from Rs 853 crores to Rs 1493 crores, a growth of 74.99%.

OTHER HIGHLIGHTS:

ON TECHNOLOGY FRONT:

* The largest number of ATMs (As on 31st March 2007): 6473 and largest card base (25.36 million Cards).

* SBI Branches under CBS now 4819 as on 15th April 2007.

* 9639 Group Branches are now on Core Banking Platform

* 90% of business of State Bank Group is now on Core Banking.

International Business Group:

Profit after tax of Bank's foreign offices and subsidiaries recorded a YOY growth of 31% increasing from USD 77.11 mio to USD 100.86 mio in 2006-07. Net Balance Sheet size increased from USD 10.75 bio to USD 13.78 bio in the year.

With opening of 7 offices in the year 2006-07, the total number of foreign offices has gone up to 83 in 32 countries.

The Bank raised funds aggregating USD 1.210 bio under its MTN programme in 2006-07. The size of the programme was increased to USD 5 billion from USD 2 billion to fund longer tenor assets build up in foreign centres.

FUTURE PLANS AND STRATEGIES:

1) New Businesses:

* The Corporate strategy and New Business Group has been created to focus on emerging opportunities. The Bank plans to enter into the areas of merchant acquisition, payment solutions, Private Equity, Infrastructure Fund, Venture Capital, Pension Funds Management, General Insurance and Financial Planning & Wealth Management.

2) Rural Business :

* Plan to credit-link 2.63 lac SHGs thus surpassing our mission of credit-linking 1 million SHGs by March 2008.

* Tie-up with around 20,000 internet kiosks during next 24 months.

* Under Financial Inclusion initiatives, to cover 1 lac villages in 24 months.

* We plan to issue 10 million SBI Tiny Cards by March 2009.

* Developing alternate delivery channel through:

- Business Facilitators

- Business Correspondents

3) Corporate Accounts Group (CAG):

* CAG will be focusing more on the fee-based income in future.

* Institutional Accounts Group formed for focusing on Banks and Financial Institutions.

* CAG to offer more technology-supported products to meet the market expectations

and offer total range of products and services to our corporate customers, under one

roof.

4) Treasury Group:

Bank in its pursuit to provide better returns to its customers and shareholders is in the process of launching derivative embedded products to help customers utilise the new RBI dispensation to manage their risks and earnings more effectively.

The need and demand for these products is expected to grow as more and more sectors become exposed to the global economy. The Bank is in readiness to bring home to its customers the benefit of the new products and opportunities.

Note : As required by RBI vide circular dated 20.4.2007, the Bank has deducted the Loss on Revaluation of Investments from "Other Income". This was earlier included in "Provisions & Contingencies". Accordingly, previous year figures have been regrouped wherever necessary.