SBH Q2 net dips 12% to Rs 232 cr

Public sector lender State Bank of Hyderabad's (SBH) net profit for the quarter ended September 30, 2011, dipped by 12.25% to Rs 232.04 crore owing to higher non-performing assets (NPAs).

However, the bank's total income for Q2 grew by around 32.7% at Rs 2,821.9 crore compared to Rs 2,127 crore in the corresponding period last fiscal.

"The drop in the net profit is because of the increased provision the bank made owing to the increasing NPAs. This is because of the overall economic downturn and we hope to contain it at this level. There are NPAs in all sectors," SBH Managing Director M Bhagavantha Rao said.

 

The total provisions and contingencies, apart from the tax provisions, were Rs 218.88 crore of which Rs 174.91 was for the NPAs. The net NPAs for the second quarter this fiscal stood at 1.92%, while it was 0.64% in the same period last fiscal, he said.

Replying to a query on savings bank (SB) account rates post deregulation, Rao said the bank would take a call on the issue in current quarter.

"One per cent rise in the SB interest rate would cost the bank Rs 182 crore," he added.

In the wake of Reserve Bank of India deregulating the SB rates, the banks are now now free to fix their savings bank rates on deposits above Rs 1 lakh, while below that amount it should be a uniform rate.

SBH currently offers 4% interest on the savings bank deposits.