SBI Hyderabad checks default

Calcutta, Nov. 29: The State Bank of Hyderabad expects to maintain its profitability in the second half of the fiscal with bad loans remaining under control.

The bank's September-quarter net profit grew 21 per cent to Rs 375.31 crore over the year-ago period. Gross non-performing assets (NPAs) stood at 4.92 per cent, lower than the year-ago period.

"We are not very bullish on topline growth, but focusing on improving the profit. The first two quarters were good and we expect to keep the momentum going in the next two quarters," managing director Santanu Mukherjee said.

He said though credit offtake was yet to gain momentum, especially in the corporate sector, delinquencies had stabilised.

"At the moment, there are not many new projects coming in. But there are some signs of recovery, especially in the road and construction segment," he said.

The bank has already shed over Rs 400 crore debt to asset restructuring companies (ARCs) this year and is looking to sell Rs 200 crore more. "We are in discussion with ARCs on a regular basis," Mukherjee said, adding that power, steel and to some extent textile are the stress sectors.

He said the lender's capital adequacy ratio stood at 11.11 per cent at the end of the September quarter.

The bank also has approval to raise tier II capital to meet its growth requirement.

"There is approval and we are watching the market," Mukherjee said.

State Bank of India