The biggest challenge is loan growth, says Pratip Chaudhuri

State Bank of India (SBI), on Friday, reported a net profit of Rs.3,752 crore for the first quarter ended June 30, 2012, against Rs.1,583 crore in the year-ago period, a sharp rise of 137 per cent.

However, its gross non-performing assets (NPAs) have gone up. “We were able to contain [NPAs with regard to] large corporates, but our nemesis is mid-corporate sector and small and medium enterprises (SMEs),” said Pratip Chaudhuri, Chairman, while addressing a press conference here.

The slippage (net NPA) was Rs.7,480 crore in this quarter. But “we will be able to reverse Rs.2,000 crore,” in few months, said Mr. Chaudhuri.

The SBI Chairman also said that agriculture NPA was going to grow as major agricultural production centres were hit by drought. “Once the district administration declares drought in particular areas, these loans will be restructured.”

Credit growth

“The biggest challenge is the loan growth,” said Mr. Chaudhuri, adding, “We will not be able to meet the corporate credit growth. But we will compensate that with retail credit growth.”

Large corporate advances increased from Rs.1.14 lakh crore to Rs.1.42 lakh crore, a growth of 24.02 per cent. Mid-corporate advances increased from Rs.1.58 lakh crore to Rs.1.68 lakh crore, a growth of 6.34 per cent.

Retail advances increased from Rs.1.65 lakh crore to Rs.1.86 lakh crore, a growth of 12.83 per cent. Home loans increased by 13.04 per cent from Rs.93,225 crore to Rs.1.05 lakh crore. Auto loans increased by 22.53 per cent and education loans by 10.97 per cent.

SME advances increased from Rs.1.23 lakh crore to Rs.1.34 lakh crore, a rise of 8.98 per cent while agricultural advances rose from Rs.95,452 crore to Rs.1.20 lakh crore, a growth of 25.85 per cent.

International advances were higher by 48.41 per cent from Rs.1.10 lakh crore in June 2011 to Rs.1.64 lakh crore in June 2012.

Deposits increased by 16.09 per cent from Rs.9.50 lakh crore in June 2011 to Rs.11.03 lakh crore in June 2012. Savings bank deposits increased from Rs.3.44 lakh crore in June 2011 to Rs.3.90 lakh crore in June 2012, a growth of 13.36 per cent. “Our savings bank growth is in a competitive manner.” However, Mr. Chaudhuri said, “current account growth in number and percentage is not satisfactory.”

Gross advances increased from Rs.7.88 lakh crore in June 2011 to Rs.9.45 lakh crores in June 2012, a growth of 20 per cent.

Credit deposit ratio (domestic) increased from 76.68 per cent to 77.75 per cent, an increase of 107 basis points (bps).

The operating profit increased from Rs.7,242, crore in the first quarter of last fiscal to Rs.8,177 crore in the first quarter of the current financial year, a growth of 12.90 per cent. Total income increased to Rs.32,415 crore from Rs.27,732 crore, a rise of 16.89 per cent.

Capital adequacy ratio increased from 11.60 per cent (Tier-I: 7.60 per cent) in June 2011 to 13.17 per cent (Tier I: 9.38 per cent) in June 2012. Net interest income was up at Rs.11,119 crore against Rs.9,699 crore.

Total interest income increased from Rs.24,197 crore to Rs.28,917 crore, a growth of 19.50 per cent.

The net profit of the SBI group shot up by 94.02 per cent at Rs.4,875 crore against Rs.2,512 crore. The operating profit was Rs.10,842 crore against Rs.9,246 crore, up 17.26 per cent.

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