SBI net profit rises 52% to Rs 2,432 crore
By Our Banking Bureau | 21 Jun 2002
The
operating profit of the bank rose to Rs 6,044.83 crore against Rs
3,966.78 crore in 2000-01, registering a growth of 52.39 per cent.
SBI chairman Janki Ballabh says the increase in net profit was due
to an increase in the net interest income of 8.33 per cent. The
other income of the bank increased by 7.5 per cent. SBI also
reduced its operating expenses by 14.1 per cent.
Moreover, we made a
net gain of 0.5 per cent on the falling interest rates in
deposits. In absolute terms, it was Rs 2,600 crore, but the rate
of lending also fell by 400 basis points. The net effect was Rs
300-400 crore, which translates into 0.5 per cent, says Ballabh.
He says the banks profits were depressed both in 2000-01 and in
2001-02 owing to expenses on account of voluntary retirement
schemes (VRS) and India Millennium Deposits. It wrote off the
deferred revenue expenses relating to VRS on a pro-rata basis.
Moreover, the bank made provisions for investment depreciation,
which includes amortisation of premium on held to maturity
category. Further, as per Reserve Bank of India guidelines, the
appreciation in the held for trading category of investments
was not recognised by the bank during the current years
accounts.
On a fully comparable basis, the adjusted net profit of 2001-02 would have been Rs 2,841.76 crore and in 2000-01 it would have been Rs 2,160.48 crore. Hence, the effective point-to-point growth in net profit in 2001-02 would have been only 31.53 per cent, he says.
For the current financial year, SBI has targeted a 25-per cent increase in net profit. And, the expected net profit of the bank during 2002-03 may thus be a little over Rs 3,000 crore.
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