SBM net profit rises 41%

State Bank of Mysore (SBM), the Bangalore-based associate bank of SBI Group, today said its net profit for the quarter ended March 31, 2014 increased 41% to Rs 107 crore compared to Rs 76 crore in the corresponding quarter last year.

Higher interest income and lower cost of deposits and reduction in net non-performing assets aided the bank?s earnings growth during the fourth quarter.

The bank's total income for the period went up 6% to Rs 1,825 crore from Rs 1,721 crore in the year ago quarter. The operating profit for the fourth quarter increased marginally by 2.3% to Rs 361 crore as against 353 crore in the same quarter last year.

Net interest income was at Rs 516 crore in the fourth quarter, up 10.2% from a year ago. Net interest margin, however, went down 20 basis points to 3.02% from 3.22% a year ago.

"A combination of factors like improvement in our net interest income and reduction is non-performing assets and lower cost of deposits helped us to show better performance in the fourth quarter. Our retail advances registered an all round growth during the quarter," said Sharad Sharma, Managing Director, SBM.

The cost of deposits came down to 7.21% as on March 2014 as against 7.32% in March 2013.

The Bank's provisions increased 21% to Rs 278 crore from Rs 230 crore in the fourth quarter last year. Of this, provisions towards the non-performing assets (NPA) went up 69% to Rs 203 crore.

The net NPA percentage increased to 3.29% from 2.69% a year ago. The return on assets (annualised) improved to 0.59% from 0.46% a year ago. The provision coverage ratio increased to 59.5% during the fourth quarter from 55% as at December quarter of 2013-14.

The Bank's capital adequacy ratio stood at 11.08% under Basel-III norms during 2013-14.

The total business of the Bank crossed Rs 112,000 crore as on March 2014. The Board of Directors has declared an interim dividend of 30% (Rs 3 per share on a face value of Rs 10 per share) for the year 2013-14.