MUMBAI: State Bank of India, the nation’s largest, said quarterly earnings climbed 10% on gains from bonds and currency trading even as its profits from lending to companies and individuals fell. Bad loans rose. Net profit advanced to Rs 2490 crore in the September quarter matching estimates, from Rs 2260 crore a year earlier, the bank said in a statement.
A survey of analysts forecast showed its net profit may rise to Rs 2460 cr. "The performance would have been much better had it not been for the huge liquidity overhang, additional provisions for pensions and wage settlement," said O.P. Bhatt, the chairman of the bank. State Bank of India is fighting a deluge of deposits rush after the collapse of Lehman Brother Holdings led to a run on many banks which were seen weak.
The reduction of benchmark rates by the Reserve Bank of India to beat the credit crisis has brought down the lending rates for borrowers, but the banks, especially public sector ones, were not able to reduce deposit rates proportionately leading to pressure on their profitability. Also, the relaxation of bad loan norms to fight the credit crisis is coming home to roost.
"State Bank of India is a barometer of the Indian economy, and if the economy does well, so should State Bank, especially given its wide presence," said Sandesh Kirkire, chief executive officer of Kotak Mahindra Asset Management Co., which manages 380 billion rupees in Mumbai. "All indicators of the economy point to a revival and SBI should benefit directly from it," press reported Kirkire as saying.
Treasury profits rose 236% to Rs 545 crore from Rs 162 crore while profit from core fee income, i.e., commissions and brokerages, rose 58% to Rs 2103 crore, from Rs 1331 crore a year earlier, the bank said. But the lending business has not improved to the pre-credit crisis levels even as the central bank has cut its loans growth for the fiscal year to 18% from 20% earlier.
Its pre-tax profits from corporate lending fell 10.4% to 1,408 croers in the September quarter, from 1,573 crores a year earlier. So was the case with retail lending where pre-tax profits fell 27 % to Rs. 1703 crores from Rs. 2,337 crores a year earlier, according to the statement.
The stress in the economy despite the credit easing measures is reflected in rising bad loans of the bank. Gross non-performing assets, or NPA, rose to 2.99% in September ‘09 quarter, from 2.79% in the preceeding quarter. The incremental retail NPAs accounted for 44% of total incremental NPA.
The bank has provided Rs 7449 crore crore for bad loan on its gross NPA of Rs 17,376 crore. Its provision coverage ratio (PCR) stood at 42.8%. Mr Bhatt said that if RBI’s norm that all banks should have PCR of 70% is to be adhered, the bank will have to make additional provision of Rs 5,000 crore.
The bank’s NPA has increased by Rs 1662 crore in six months ending September 09. Deposits rose 25%, despite its attempts to stem the flow by lowering the interest rates. The deposits rose by Rs 9341 crore in second quarter compared to Rs 67,000 crore in the first quarter when investors fled for safety. The share of low cost deposits stood at 40.9% against 39.7% a year ago. Loans were at Rs 580,237 crore, growing 16% from a year ago.
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Banker's Association or Beggar's Association
ReplyDeleteBank Staffs (Beggars Association) - How to live well after 9th wage settlement of 17% (effective for Bank Employees)
" There are thousand of Bank Staff which supports the union’s decision of 10-17% settlement demand on a/c of there few years in Job, fear of transfer and running businesses. But there is a big number which is suffering because of increasing expenses which are not being met by current wage revision.
As all of us do not have the courage to challenge the ongoing system let us devise some ways to beat the rising cost.
1. If you own a house, give it on rent and shift to near by slum. This way you will be able to increase your income. Some day your child may become slumdog Banker
2. Apply for a BPL ration card. As per new manifesto you will get Wheat and Rice for Rs.2 or Rs.3 per KG whosoever make the government.
3. Use Municipal Primary schools for the education of your children, if you cannot afford private and live in an affordable housing i.e.Jhuggi.
4. Use Primary healthcare center for medical treatment.
5. Use Public conveyance on maximum occasions.
6. Take tuitions at home.
7. Look for alternate jobs if you are still eligible for other central/state Govt . jobs.
8. Purchase cloths form Jama Masjid market at cheap rate.
9. Buy vegetables when the whole community finishes purchasing. You will get vegetables at lower price.
10. Mr.Venkatachalam will ensure that you follow all the above religiously .Some day Government will come out with some rehabilitation plan for Bankers (Beggars) i.e. waiver of Staff Overdraft, Staff Housing Loan, Vehicle Loan etc
Bank Staffs (Beggars Association) "
source : http://www.allbankingsolutions.com