State Bank of India, the countrys largest commercial bank, yesterday announced a hefty 60 per cent increase in its net profits to Rs 1,329.30 crore for the year ended March 31, 1996-97. It had posted a 16.2 per cent growth in net profit at Rs 831.60 crore in fiscal 1995-96.
The bank board, which met here yesterday, recommended a dividend of Rs 4 per share, subject to RBI approval. The central banks approval is mandatory if the dividend proposed is over 25 per cent.Announcing the results here, SBI chairman MS Verma said the banks gross profit touched Rs 3,397.63 crore, up 12.1 per cent from the previous years Rs 3,030.13 crore. SBIs total income increased to a hefty Rs 17,593.73 crore from Rs 15,715.59 crore in the previous year.
With the results being in line with general market expectations, the bellwether SBI scrip gained Re 1 over the previous close to end the day at Rs 339 on the BSE. It had opened at Rs 337.75 to touch an intra-day high of Rs 343 after the results were announced. However, the scrip slipped to Rs 339 at close on sustained profit-taking. About 64.77 lakh shares worth Rs 219.13 crore changed hands on the BSE yesterday. On the NSE, the scrip touched an intra-day high of Rs 344 before closing at Rs 340.65, down 85 paise over the previous close.
On the GDR market, the SBI scrip was being quoted at $26.90 at 1800 IST compared with the previous close of $26.85.
The banks domestic deposits grew by 15.1 per cent to touch Rs 1,03,767 crore; its deposits had increased by 12.3 per cent in the previous year.On the outlook for the current fiscal, Verma said SBI would try very hard to match the last years profit growth. Sixty per cent over 60 per cent is a very tough job. Besides, the base has grown in a major way. But we will try our best, he said.
Verma said the last four or five months of the 1996-97 saw a minor increase in credit offtake, which resulted in the bank managing a modest net domestic credit growth of 6.2 per cent. This was in sharp contrast to the 25.7 per cent growth in net credit clocked in 1995-96. The bank attributed this to the poor credit offtake in the banking system.The banks priority sector lendings stood at Rs 16,946 crore, up 13.4 per cent from the previous years figure.
As a percentage of net bank credit, priority sector lending improved from 34.4 per cent in 1995-96 to 38.3 per cent in 1996-97.
SBIs international operations recording a net profit increase of 55 per cent at Rs 143.58 crore. SBIs earnings per share of Rs 10 increased from Rs 17.54 to Rs 26.66 (annualised) and return on equity (RoE) rose from 15.22 per cent to 16.67 per cent. Return on average assets (RoA) increased from 0.598 per cent to 0.88 per cent.
SBI now had a capital adequacy ratio (CAR) of 12.17 per cent against the previous years 11.6 per cent. This comprised an 8.45 per cent adequacy in tier I capital and 3.72 per cent level in tier II capital.
Verma said SBI had opened two more corporate accounts group (CAG) branches, apart from the one in Mumbai, at Calcutta and Chennai. It plans to open one each in Bangalore and Ahmedabad.
The CAG exercise has resulted in 115 top corporate clients of SBI being brought into the single-window mechanism for quick and cost-effective delivery of credit. Total advances at the CAG branches as on March 31, 1997, constituted 18 per cent of the banks commercial and institutional advances.
Verma said the leasing strategic business unit (SBU), a fallout of the McKinsey restructuring recommendations for SBI, had booked leasing business amounting to Rs 308 crore during the year, and cumulative sanctions stood at Rs 470 crore as at end-March. The SBU focuses on funding the rapid growth in capital expenditure through big ticket, tax efficient leasing products. On the project finance SBU, he said the unit was appraising proposals whose aggregate project cost stood at a hefty Rs 40,000 crore. These were in the telecoms, power, refineries and ports and were phased out over the next three to four years.
