State Bank of India reported a 32 per cent drop in its net profit for the fourth quarter of FY2009-10 compared to the corresponding period of the previous fiscal. The net profit for this fiscal stood at Rs 1,867 crore against Rs
2,742 crore in Q4 of FY09. The net profit of SBI in the last fiscal was Rs 9,166 crore compared to Rs 9,121 crore in 2008-09.
Pointing out the reasons for the dip in net profit, the SBI chairman, Mr O.P. Bhatt, said, “Though our interest income and fee income were increased, but our operating expenses grew at 40.93 per cent mainly due to increase in staff expenses. There was also a growth in NPA by Rs 674 crore, besides Rs 40,000 crore extra liquidity in our hands. These combined factors were responsible for the drop in net profit.”
The gross NPA to total asset was also increased to 3.05 per cent in March 2010, compared to 2.86 per cent in March 2009. “Incremental NPAs are going down for last two quarters and will continue to do so,” Mr Bhatt added.
On being asked about the SBI’s outlook for the current fiscal, he said that credit growth would be 21-22 per cent, while deposits would grow after June.
SBI is also planning to float a retail bond in the first half of the current fiscal to raise an amount between Rs 200 crore and Rs 500 crore to meet its tier-II capital needs. “We also want to raise Rs 15,000-Rs 20,000 crore through rights issue in this fiscal. We are now in discussion with the government of India in this regard,” the SBI chairman revealed.