The country’s largest bank—State bank of India announced a flat profit growth of 0.4% in the quarter ended June-September quarter, year- on-year, as the bank witnessed a sharp rise in its loan loss provision.
The net profit of the bank stood at R2,501 crore while the total interest income rose by 11.4% over the corresponding quarter last year to touch R19,808 crore. While the operating profit of the bank rose by 32% at R6,357 crore, the net profit growth remained flat during the quarter as the loan loss provision during the quarter stood at R 1,511 crore taking the total provisioning at R3,856 crore (a rise of 64%).
The bank also witnessed a rise in the staff expenses by 40% during the quarter as it rose from R2,634 crore in the quarter ended September 2009 to R3,676 crore in the last quarter.
The share price of the bank slipped on Monday even before the results were announced and fell by 1.9 % to close at R3,422.7 per share. The bank however improved on its net interest margin as it rose by 87 basis points (100 basis points is one percentage point) year on year (YoY) and stood at 3.3%.
The bank also witnessed 10.7% YoY increase in its deposits at R855,345 crore and its low cost deposits (CASA—current account and savings account) improved from 40.96 % a year ago to 47.8% in the previous quarter.