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SBI first quarter net up at Rs 580 cr

Our Bureau

MUMBAI, July 25

State Bank of India has registered an increase of 25.58 per cent in net profit to Rs 579.78 crore for the quarter ended June 30, 2001 as compared to Rs 461.7 crore in the corresponding period in the previous year.

According to the bank, it could report higher profit in spite of a provision of Rs 88.63 crore towards VRS expenditure in addition to the provisioning at Rs 883.22 crore (Rs 625.06 crore).

Mr Janki Ballabh, Chairman, SBI, said the improved performance could be attributed to (among other factors) the increase in the net interest income (14.49 per cent) and other income (23.18 per cent).

The increase in staff cost in the first quarter has been a nominal 0.69 per cent as against 10-12 per cent year-on-year.

Brushing aside the general pessimism on the economic front, Mr Ballabh, said the bank's current growth level appeared sustainable. ``We are expecting a turnaround on account of the good monsoons. There should be a pick-up in credit,'' he said.

The increase in net interest income at Rs 2,145.8 crore (Rs 1,872.65 crore) has been attributed to a ``substantial growth in interest income, both on advances as well as on resources deployed in treasury operations.''

``The Rs 2,300-crore outgo, faced on account of 21,000 employees opting for the voluntary retirement scheme, will be recovered in the next 4-5 years. The saving in the staff cost is already reflected in the first quarter,'' he said.

Mr Ballabh said the increase in operating expenses has also been marginal at 5.24 per cent.

The total income was at Rs 8,131.89 crore (Rs 6,727.13 crore) and included interest earned at Rs 7,141.42 crore (Rs 5,923.05 crore) and other income, which recorded an increase of 21 per cent, at Rs 990.47 crore (Rs 804.08 crore).

The interest earned includes income on investments at Rs 3,307.66 crore (Rs 2,669.43 crore) and interest/discount on advances and bills at Rs 2,854.03 crore (Rs 2,601.83 crore).

Total expenditure was at Rs 6,668.89 crore (Rs 5,640.37 crore) and includes interest expended at Rs 4,995.62 crore (Rs 4,050.4 crore) and operating expenses at Rs 1,673.27 crore (Rs 1,589.97 crore). Operating profit recorded a growth of 34.62 per cent at Rs 1,463 crore (Rs 1,086.76). Provision and contingencies were at Rs 462.69 crore (Rs 423.87 crore) and provision of taxes were at Rs 420.53 crore (Rs 201.19 crore).

An amount of Rs 450 crore (Rs 350 crore) has been provided for towards NPAs in the first quarter.

Advances of the bank stood at Rs 1,09,377 crore (Rs 1,01,429 crore). The increase in interest income on advances in India was 11.45 per cent and average yield on advances declined to 10.17 per cent from 10.19 per cent. Deposits increased to Rs 2,05,626 c rore (Rs 1,79,839 crore).

He added that the bank's thrust areas would be technology. ``We are looking to reduce transaction costs to cope with the outflow on account of VRS,'' he said. The bank would maintain its focus on retail banking.