State Bank Of India Defies Trend By Increasing Net Interest

State Bank of India (SBI) leads the trio of listed public sector banks by recording a 60 per cent increase in net profit for the period ended March 1997.

The corresponding figures for Bank of Baroda (BoB) and Oriental Bank of Commerce (OBC) is placed at 32 per cent for BoB and a paltry four per cent for OBC. The net profit are placed at Rs 1,329.3 crore, Rs 276.53 crore and Rs 180.4 crore for SBI , BOB and OBC, respectively.

The banks have also rewarded the shareholders suitably with SBI recommending a 40 per cent dividend. BoB and OBC have recommended 26 per cent and 25 per cent, respectively. The dividend from SBI and BoB will be subject to Reserve Bank of Indias (RBI) approval as it exceeds 25 per cent.

 

SBI has defied the trend in the listed public sector banks by having an increasing spreads for the 12 months ended March 1997. Net interest spread of SBI has inched up marginally to 4.01 per cent, whereas BoBs spread came under pressure to 3.39 per cent.

The three banks have recorded an increase in their total income, with SBI leading way ahead at Rs 17,593.73 crore followed by BoB at Rs 4,220.39 crore and OBC at Rs 1,250.5 crore. The provisions made by the banks amounted to Rs 2,068.33 crore for SBI , 499.9 crore for BoB and Rs 120 crore for OBC.

The return on assets have improved for SBI to 0.88 per cent, whereas they stand at 0.78 per cent for BoB.

It goes without saying that the bank spreads have heavily come under pressure and this is expected to continue for the first half this year. The bank performances are likely to see a downward trend with most bankers expecting a slow growth in asset offtake and this has already been reflected in the results for the second half of most banks which have been ordinary at best.