State Bank of India Working Results H1FY07

Profitability:

* Operating Profit for Q2FY 07 at Rs.2473 crores is up by 24.69% over Rs.1983 crores Operating Profit for Q2FY 06.

* Operating Profit for H1 FY07 stood at Rs 5309.01 crores, which is 12.72% higher than the Operating Profit of Rs 4710.50 crores for H1FY 06 excluding one time item of interest on IT refund.

* Bank has posted a Net Profit of Rs 1983.06 crores for H1FY07. The Net Profit this half would have been higher but for two factors: presence of one time item of interest on IT refund of Rs 712 crores in H1FY06 and much higher tax provisions in H1FY07. The Net Profit for H1FY 06 was Rs 2438.19 crores. * Interest Income on Advances in H1FY07 has registered an impressive growth of 37.48% YOY. Excluding the impact of one-time items, Net Interest Income (NII) is up by 8.87% over H1FY06. NII as on H1FY07 is Rs 7782.74 crs as against Rs 7861.18 crs in H1FY06 and Rs 7149.28 crs adjusted for one-time item in H1FY06.

* Net Interest Margin (NIM) of the Bank for the half year ended 30.09.06 was at 3.32% compared to 2.92% as on 31.03.06 (adjusted for one time interest income) and thus Core NIM has improved by 40 bps.

* Non-interest income (Excluding Treasury Income) grew very well by 19.58% from Rs 2187.41 crores in H1 FY 06 to Rs 2615.68 crores in H1 FY 07.

* Operating Expenses have registered a moderate increase of 6.78%. Staff cost has increased by 5.56% only and has now settled at a reasonable growth % on a comparable base. The staff costs would have been much lower but for the on-going payments to staff opting for early exit.

* Provisions made for this half year were at Rs 3325.95 crores, as against Rs 2984.21 crores made in H1FY05-06. The major amounts of provisions made were as under:

Provision for depreciation in investment is Rs 1527.40 crores as against Rs 2397.07 crores during H1FY 06. Provision made during Q2 FY 07 was only Rs.423.40 crs mainly on account of amortization of premium in HTM category.

Provision for taxes at Rs.1362.65 crores (Deferred Tax Rs.176.34 crores & FBT Rs 22.50 crores) as against Rs 400.09 crores (including Deferred Tax of Rs 343.36 crores and FBT Rs 19 crores) in H1FY 06.

* Adjusting tax provision for H1FY 06 based on tax provisions for full year FY05-06, the net profit for H1FY 07 would be much higher than that for H1FY 06.

Deposits:

* Bank's Domestic Deposits (excluding Inter Bank) growth has been excellent at Rs 15224 crores during Q2 FY07, despite less reliance on bulk corporate deposits, due to pan-India network of 9306 branches.

* Bank's Deposits grew by Rs 38173 crores to Rs. 392615 crores as at the end of September 2006 from Rs 354442 crores (excluding IMDs) as at the end of September 2005 recording a growth of 10.77%.

* The cost of deposits declined from 4.64% in September 2005 to 4.51% in September 2006 helped by improvement in CASA Ratio.

* CASA Ratio of the Bank improved from 39.48% as on September 2005 (excl. IMDs) to 42.64% as on September 2006, an increase of 316 bps, helped by vast ATM network of the Bank and focus on salary / new accounts.

Advances:

* Bank's Domestic Advances (excl. Food) grew by Rs 17293 crores during Q2FY07.

* Gross Advances grew to Rs 288840 crores as at the end of September 2006 from Rs 238351 crores as at the end of September 2005 i.e. a growth of Rs 50489 crores equal to 21.18% YOY.

* Bank's Domestic Advances (excl. Food) grew to Rs.249703 crores as at the end of September 2006 from Rs.200991 crores as at the end of September 2005 i.e., a YOY growth of Rs.48712 crores equal to 24.24%.

* The average yield on advances improved to 8.55% in September 2006 from 7.81% in September 2005. Due to the volume growth in advances and improvement in yield, interest income on advances went up by 37.48% compared to H1FY 06.

* As on 30th September 2006, the advances in personal segment have grown (YOY) by Rs.13602 crores. The outstanding personal segment advances aggregate Rs 65810 crores at the end of September 2006.

* The Bank continues to perform well in housing finance. As on 30th September 2006, housing advances have grown (YOY) by Rs 6230 crores and the total outstanding, as at the end of September 2006 was Rs 34571 crores. Housing loans disbursed during H1FY07 are around Rs.4800 crores.

* The growth in Retail advances is 26.05% over September 2005. Retail Advances constitute 25.75% of Bank's Gross Domestic Advances as at the end of September 2006 as against 24.73% as on September 2005. Housing Loans constitute 52.53% of Bank's Retail Advances as on September 2006.

* Agricultural advances grew to Rs 30610 crs as at the end of September 2006 from Rs 23708 crores as at the end of September 2005, i.e., a growth of Rs.6902 crores (29.11%) on YOY basis. Disbursements during the half-year ended September 2006 were at Rs.10691 crores.

* Gross NPA and Net NPA ratio have declined from 5.26% and 2.27% as on 30th September 05 to 3.57% and 1.67% respectively as on 30th September 06.

Technology:

* The total number of ATMs (As on 16th Oct 2006): 5624 and largest card base (19.55 million Cards).

* SBI Branches under CBS now 3710 and 8465 group branches on CBS.

* 64% of business and 88.92 million accounts of SBI Group are now on Core Banking

* Mid to Large sized branches now being migrated to Core Banking Solution to cover a larger portion of business on CBS.

* Corporate Internet Banking product of the Bank adjudged the best product in India by IDRBT, Hyderabad recently.

Other Highlights:

* Return on Average Assets at 0.78% upto H1FY 07 has improved from 0.64% upto Q1FY07.

* Return on Equity at 13.39% upto H1FY07 is up from 11.23% upto Q1FY07.

* Earning Per Share is up at Rs.75.36 upto H1FY07 from Rs. 60.69 upto Q1FY07 (annualized).

* Core NIM moving up sharply.

* The Bank added Rs 5543 crores to its capital during H1FY07 by way of Upper Tier-II Subordinated Debt, which helped the Bank in improving its Capital Adequacy Ratio.

* Total Tier II Bonds mobilization in last 11 months: Rs.10226 crores

* Tier "� I Capital Adequacy Ratio of the Bank as on 30.09.06 is 8.74%.

* Bank has eligibility to raise Tier I Hybrid Debt of over Rs.4000 crores to improve its Tier I Ratio.