SBI Q1 profit down 45.6% to Rs 1,584 cr due to provisioning

Country's largest lender State Bank of India (SBI) today reported a 45.6% fall in stand alone net profit at Rs 1,584 crore for the first quarter of this fiscal due to higher provisioning for bad loans and depreciation on investments.

Country's largest lender State Bank of India (SBI) today reported a 45.6% fall in stand alone net profit at Rs 1,584 crore for the first quarter of this fiscal due to higher provisioning for bad loans and depreciation on investments.

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The bank had a net profit of Rs 2,914 crore in the April- June quarter of the last fiscal.

"We had to make higher loan provisions as per the stiffer prudential provisioning norms of the Reserve Bank across all
grades of assets," SBI chairman Pratip Chaudhuri told reporters after announcing the quarterly numbers here.

There is an unexpected event in the form of depreciation in bonds and the loss due to that is Rs 1,048 crore. The loss
on account of equity investment is to the tune of Rs 300 crore, he said.

On consolidated basis, the bank's net profit grew by 25.3% to Rs 2,512.4 crore in the quarter against Rs 3,365.2
crore in the year-ago period.

The consolidated total income increased to Rs 39,126 crore in April-June quarter of 2011 from Rs 32,808 crore in
the same period last fiscal.

The total provisions increased by 75% over the last year to Rs 2,439 crore. Of this, the bank made a specific
provision of Rs 550 crore under counter cyclical buffer.

SBI's total income, however, increased to Rs 27,731.6 crore in the quarter under review from Rs 22,142 crore in the
year-ago period.

Operating profit recorded a growth of 18.06% at Rs 7,242 crore compared to Rs 6,134 in the first quarter of
previous fiscal, he said.

He also said that the core operation of the bank has shown significant growth in the quarter and has reached all-
time high level. The net interest income (NII) surged by 32.8% to Rs 9,700 crore compared to Rs 7,304 crore in the
same quarter a year ago.

Net Interest Margin (NIM) is also high. It has improved to 3.62% at the end of June 2011, from 3.18% as on June 2010, he said.

"NIM would continue upwards of 3.5% for the current fiscal," he said.

The bank's non-interest income declined by 4.2% to Rs 3,534 crore from Rs 3,690 crore in the April-June period
of 2010.

As far as asset quality of the bank is concerned, Chaudhuri said there has been a net increase of Rs 2,442 crore
in non-performing assets (NPAs) during the quarter due to continued stress in mid corporate, SME and agri segments.

Of Rs 1,060 crore increase in corporate sector NPAs, as much as Rs 796 crore has come from the standard restructured portfolio.