SBI Q3 net profit up 13.4% at Rs 3,806 cr

The bank has reported good numbers for the December quarter despite a massive 84.02 per cent voluntary hike in provisioning for bad loans at Rs 1,797 crore for Q3,taking our total bad loan provisioning to Rs 5,528 crore (in excess of RBI norms) to enable the bank reach a PCR (provision coverage ratio) of 64.07 per cent. Had it not been for this,our profit could have been much higher at Rs 3280 crore,a growth of 32.31 per cent, chairman Om Prakash Bhatt said.

The banks gross non-performing assets (NPAs) increased from Rs 18,861 crore (3.11 per cent) in December 2009 to Rs 23,437 crore (3.17 per cent). On a quarter-on-quarter basis,the bank saw a major decline in its bad assets to just Rs 233 crore during the reporting quarter. Against this,in the first and second quarters of the current fiscal,SBIs bad assets stood at Rs 1,290 crore and Rs 2380 crore respectively.

According to SBI,net interest income (NII) increased by 43.28 per cent in Q3 over a growth of 9.69 per cent recorded in December 2009.

Growth in interest expenses on deposits contained at 3.22 per cent during Q3FY11 due to robust growth in CASA deposits which have increased by 27.71 per cent. While cumulative net interest margin improved significantly by 84 bps to 3.40 per cent as on December 2010 from 2.56 per cent as at the end of December 2009,it improved by 74 bps from 2.66 per cent in March 10.

Deposits of the bank went up from Rs 7,70,985 crore in the previous year to Rs 8,78,979 crore by December 10,recording a Y-o-Y growth of 14.01 per cent,driven by CASA growth of 27.71 per cent and retail TD growth of 5.27 per cent. Gross advances up by Rs 1,32,817 crore,a Y-o-Y growth of 21.88 per cent from Rs 6,07,154 crore last year to Rs 7,39,971 crore in December 10.

The major contributors to fee income growth were commission from government business,commission from cross selling,loan processing charges,underwriting fees and commission from LC/BG business.