SBI, the country's largest commercial bank, has disappointed with its third quarter numbers. The bank saw a fall in net interest income as interest costs increased disproportionately. Even the rise in interest income was very marginal, while most other banks continue to post excellent growth in top line.
For the quarter ended 31 December 2006, net profit declined 4.5 per cent to Rs1,065.05 crore, or Rs20.24 per share, as compared to Rs1,115.19 crore, or Rs21.19 per share, for the previous year quarter. Total income increased 1.3 per cent to Rs11,546.97 crore from Rs11,398.62 crore for the previous year quarter.
Gross interest income went up by a marginal 1.86 per cent over the previous year quarter while interest paid out was higher by 8.36 per cent. As a result, net interest income for the quarter declined 6.36 per cent over the previous year quarter.
Other income – which includes fee income, treasury income and income from investments – declined marginally to Rs1,811.03 crore from Rs1,840.47 crore a year ago.
Operating profits increased 9.82 per cent over the previous year quarter, mostly on account of a 19.59 per cent decline in staff costs and a 6.29 per cent fall in other operating expenses. Operating margins as a percentage of total income improved to 24.73 per cent from 22.81 per cent for the previous year quarter.
Provisions and contingencies jumped to Rs1,166.19 crore from Rs469.81 crore for the previous year quarter. Provisions for bad loans were Rs410.6 crore as compared to a write-back of Rs102.56 crore for the previous year quarter. Tax provisions for the quarter were substantially lower at Rs623.71 crore as compared to Rs1,014.65 crore.
Capital adequacy ratio stood at 11.86 per cent as at the end of last quarter while net non-performing assets (NPA) declined to 1.45 per cent of assets.
On a consolidated basis, SBI group has reported a net profit of Rs1,5424.42 crore as compared to Rs1,466 crore for the previous year quarter. Total income for the quarter increased to Rs17,483.2 crore from Rs15,484.26 crore a year ago.