State Bank fares well

Mumbai, Aug. 11: The State Bank of India's first-quarter consolidated net profit rose 5.97 per cent to Rs 4,714 crore, helped by lower bad loan provisioning and a healthy rise in other income.

On a standalone basis, the bank's net profit rose 10.25 per cent to Rs 3,692 crore, driven by a robust jump in treasury and investment income, which rose 19.66 per cent to Rs 5,088 crore. Of this, fee income contributed Rs 3,202 crore, up 12.86 per cent.

SBI chairperson Arundhati Bhattacharya sounded optimistic about the asset quality of the bank, saying the worst may be over for the bank.

"Overall, the stress picture is much better and with some amount of confidence I can say the recovery is having a beneficial impact on the books," she told reporters while announcing the numbers.

While loan loss provisions fell 14 per cent to Rs 3,359 crore from Rs 3,903 crore last year, total provisions increased marginally by 1.31 per cent to Rs 5,510 crore from Rs 5,439 crore in the year-ago period.

Chief financial officer and deputy managing director Anshula Kant attributed the good set of numbers to "the growth in net interest income, which rose 3.6 per cent, other income, which has gone up 20 per cent, and also on lower loan loss provisions".

Explaining the improvement in the asset quality, Bhattacharya said, "On a year-on-year basis the slippages have come down. Now, we need to understand what is the quality of the slippages. For the first time, we are seeing mid-corporate slippages very much under control. Main slippages that have occurred during the quarter are mainly in the retail area."

Kant said domestic net interest margin declined to 3.29 per cent from 3.54 per cent because of a reduction in the base rate by 30 basis points.

Net interest income of the bank inched up to Rs 13,732 crore from Rs 13,252 crore a year ago.

State Bank of India