State Bank of India Q2 net profit up 30%
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State Bank of India (SBI) today reported a 30.16 per cent rise in net profit at Rs 3,658 crore for quarter ended September 30, on the back of lower provisions towards bad loans and better management of credit.
In the first quarter of the fiscal, the bank had reported a net profit of Rs 3,752 crore, a massive 137 per cent rise over the year-ago period, driven by higher income and lower growth in operating expenses.
The profit in July-September 2012 was boosted by a steep 37 per cent drop in provisions for NPAs at Rs 1,837 crore from Rs 2,921 crore a year ago, as the bank had made higher provisions in the previous quarter.
Total income rose 12 per cent to Rs 32,953.47 crore from Rs 29,394.32 crore a year ago.
"The (higher) net profit can be attributed to lower provisioning and also better management of the credit portfolio," SBI chairman Pratip Chaudhuri told reporters at the bank's Nariman Point headquarters.
However, the bank witnessed subdued growth in its core interest income due to a slower credit growth, he said.
SBI's net interest income (NII), which is the difference between interest earned and given away, grew only 4.96 per cent to Rs 10,974 crore in the reporting quarter compared to Rs 10,482 crore in the same period last fiscal.
The key profit criterion, the net interest margin (NIM), which is the difference between the cost a bank incurs on deposits and the yield it receives by lending it in terms of interest, stood at 3.77 per cent for domestic operations and 3.45 per cent at the entity level.
In the same period last fiscal, NIM stood at 4.09 per cent in the domestic business and 3.81 percent for the group.
"We are confident of maintaining NIM above 3.75 per cent in the current fiscal," Chaudhuri said, adding that lowering of deposit rate will support the improvement in margin.