SBI, arms virtual merger begins

A K Purwar, chairman of State Bank group, has indicated that a virtual merger of State Bank of India (SBI) and its associate banks has started to take place with integration in information technology, treasury operations, accounting practices, systems and procedures and market information sharing.

In the areas of human resources development, training of manpower and cross deputation of senior officials are also being pursued.

A strong synergy has developed among SBI and the associate banks in cross-selling of insurance, mutual funds and credit cards, Purwar said.

Purwar, who was here to preside over the annual general meeting of State Bank of Bikaner & Jaipur (SBBJ), assured the shareholders of SBBJ that SBBJ and the entire group was poised to move ahead and achieve higher standards of customer care and business achievements in the years to come.

Purwar said that SBBJ had recorded the all time highest growth in business during 2005-06.

The total business increased by Rs.6,496 crore to Rs 37,790 crore. Total deposits increased by Rs 2,656 crore to Rs 21,694 crore, whereas total advances increased by Rs 3,840 crore to Rs 16,096 crore. The growth in aggregate deposits was 15.50 per cent and growth in advances 31.3 per cent.

He added that during 2005-06, the market share of SBBJ among scheduled commercial banks had improved by 1 basis points in advances.

The chairman informed that operating profit of the bank was Rs 592.37 crore during 2005-06 against Rs 729.64 crore in the previous year.

Net profit, however, was lower at Rs 145.03 crore against Rs 205.65 crore in the previous year primarily on account of lower income from treasury operations, reduction in government commission, increase in provisions for staff, introduction of fringe benefit tax and increase in provision for standard assets.

Highlighting the financial strength of the bank, Purwar stated that the net worth of the bank had increased by 8.32 per cent to Rs 1,406 crore as on March 2006.

The book value per share had improved from Rs 2,595 in March 2005 to Rs.2,811 in March 2006.

The bank's capital adequacy ratio at 12.08 per cent was well above 9 per cent benchmark prescribed by the RBI.