State Bank of India (SBI) recorded a net profit of Rs.2,828 crore for the third quarter ended December 31, 2010, up 14.08 per cent over Rs.2,479 crore in the corresponding period in the previous year despite increase in provisions by Rs.1,797 crore (84.02 per cent).
“We have beaten all consensus forecast with the good number for the December quarter despite a massive 84.02 per cent voluntary hike in provisioning for bad loans at Rs.1,797 crore for the third quarter, taking our total bad loan provisioning to Rs. 5,528 crore to enable the bank reach a PCR (provisioning coverage ratio) of 64.07 per cent,” O. P. Bhatt, Chairman, told reporters here on Saturday. “Had it not been for this, our profit could have been much higher at Rs.3,280 crore, a growth of 32.31 per cent,” he added.
The consensus forecast for the bank's numbers was a 10—11 per cent rise in profit. Analysts were also worried that the bank might again report higher bad loans this quarter. Net interest income (NII) increased by 43.28 per cent against a growth of 9.69 per cent recorded in December 2009.
While cumulative net interest margin (NIM) improved significantly by 84 basis points to 3.40 per cent as on December 2010 from 2.56 per cent as at the end of December 2009, it improved by 74 basis points from 2.66 per cent in March 2010.
Fee income went up by 13.12 per cent year-on-year in the quarter under review.
Total non-interest income declined by 1.54 per cent mainly due to decline in growth in profit on sale of investments by 49.61 per cent (Rs.217 crore). Non-interest income excluding profit on sale of investments was up 5.63 per cent.
Operating expenses have increased by 10.57 per cent year-on-year.
For the nine months ended December 31, 2010, operating profit was up 46.69 per cent at Rs.19,256 crore despite higher contribution for employees by Rs.1,829 crore (141 per cent).
The growth in operating profit was mainly driven by higher NII .
The net profit was Rs.8,244 crore against Rs.7,299 crore.
Out of the total standard restructured assets of Rs.18,395 crore restructured under Reserve Bank scheme, Rs.450 crore have slipped into the NPA category during the quarter, taking the total slippages to Rs.2,885 crore and the slippage ratio to 15.68 per cent up to December 2010.
As per Basel-II CRAR (credit to risk assets ratio) of the bank is 13.16 per cent (Tier-I: 9.57 per cent) as at the end of December 2010 as compared to 13.77 per cent in the previous year.
