SBH Q2 net up 13%

State Bank of Hyderabad (SBH) reported a 12.85 per cent increase in its net profit to Rs 264.48 crore for the quarter ended September 2010, from Rs 234.36 crore in the corresponding quarter last year. Interest income during the quarter stood at Rs 1,918.46 crore, as against Rs 1,518.65 crore in the last comparable period, reflecting a growth of 26.33 per cent.

Announcing the results here on Tuesday, Renu Challu, managing director of SBH, told reporters that the growth came mainly from housing, retail and personal banking sectors.

For the half-year ended September 30, net profit stood at Rs465.72 crore, 35 per cent higher than the previous year’s Rs344.6 crore. This was supported by 69.91 per cent increase in net interest income, on the back of growth in low-cost savings deposits.

She said the exposure to MFIs was only Rs60 crore. “We have never been bullish on this sector. SBH lent only to three accounts (MFIs), but the names can’t be disclosed,” she said.

Total deposits touched Rs78,057 crore in the six months to September 30, while advances increased to Rs 55,875 crore. CASA deposits constitute 28.19 per cent. On the credit side, personal segment credit accounted for Rs 11,736 crore, farm sector Rs 9,710 crore and MSME Rs 8,649 crore. The bank said it had achieved the 18 per cent benchmark for the agriculture sector.

Gross non-performing assets (NPAs) stood at 1.5 per cent as on September 30, 2010, while net NPAs stood at 0.64 per cent.

Challu said the bank’s market share increased to 1.69 per cent in deposits and 1.61 per cent in loans, though transaction costs had gone up in line with opening of new branches.

She said financial inclusion was a high priority for the bank, and plans were to cover 1,068 villages by March 2011 in Andhra Pradesh, Karnataka, Maharashtra and Gujarat to provide services to 4.71 million beneficiaries. In Phase I, the bank has set a target to cover 2,018 villages, and another 750 villages in Phase II. The services would be smart card-based, kiosk-based or through mobile ATMs.

“We have identified business correspondents (BCs), three technology providers (HCL, TCS and Coromandel Infotech) and customer service points (which would be 318 self-help groups). The services would be offered from next month. Each village will have a BC. This would mean the ground work has been laid and we would like to make them active accounts but business development will take time,” Challu said.

The bank will offer two new floating-rate term deposit schemes with maturity periods of 500 and 1,000 days. Challu said, “it allows our customers to gain on upside in interest rates.”