SBI net rises 51% on loan growth, treasury income

State Bank of India, the country’s largest lender, today reported a 51 per cent rise in consolidated net profit for the third quarter, helped by robust growth in loans and treasury income.

Net profit for the quarter ended December 2008 was Rs 3,607.61 crore as against Rs 2,383.67 crore in the year-ago period. Total income went up by 24 per cent to Rs 30,318.14 crore.

On a standalone basis, net profit was up 37 per cent to Rs 2,478 crore even after making an additional provision of Rs 750 crore for pension obligation due to the steeply falling yields on government securities. But for this, net profit would have risen by 76 per cent, SBI Chairman O P Bhatt said.

The yield on advances improved in the quarter. In fact, according to Bhatt, the performance improved on all key parameters.

Net interest income rose 35 per cent to Rs 5,758 crore from Rs 4,256 crore a year ago. Net interest margin rose to 3.15 per cent in December 2008 as against 3.01 per cent in December 2007. The cost to income ratio declined 4.39 per cent from 51.74 per cent in December 2008.
 

SBI Quarter ended December 2008 In % on year on year basis
Net profit	51.30
Total income	24.85
Net interest income *	35.28
Operating profit*	22.48
Gross NPA*	19.55
Net NPA*	22.35
Note: * standalone numbers NPA – non performing assets

The core fee income also saw a robust 57 per cent rise to Rs 1,609 crore.

Treasury income, primarily from trading in bonds and securities, climbed 51.4 per cent after bond yields tumbled 337 basis points in the quarter as the central bank slashed key rates to lift sagging growth. Bond prices move inversely with yield.

Deposits grew 36 per cent to Rs 6,92,921 crore. Most depositors have put money in fixed deposits that carry higher interest rate. The cost of deposit at the end of December 2008 was 5.95 per cent, up 40 basis points as against 5.55 per cent year ago.