State Bank of India has reported flat profits for the quarter ended September 30 due to higher provisioning for non-performing assets and Rs 547 crore towards an increase in employees' wages.
The bank is also likely to go for another retail bond issue in January, of around Rs 1,000 crore, Mr S.S. Ranjan, CFO, SBI, said. It had raised a similar amount in October from a retail bond issue and expects to make similar issues every quarter.
"The loan loss provision of Rs 2,162 crore made in the quarter includes Rs 449 crore made in excess of the RBI's provisioning norms to enable the bank to reach a provision cover ratio of 62.78 per cent," it said in a statement. The Reserve Bank of India in October last year said it would require banks to increase the minimum provision ratio to 70 per cent from 10 per cent.
Consolidated net falls 22%
Its total income for the quarter rose 11.8 per cent to Rs 23,813 crore. SBI's total business grew 14 per cent to Rs 1,95,428 crore at the end of the September quarter.
On a consolidated basis, SBI reported a 22.2 per cent decline in consolidated net profit to Rs 2,437.1 crore for the second quarter. The consolidated total income, however, increased 14.6 per cent to Rs 37,925.4 crore. "The drop in consolidated profits is because of the Rs 854 crore loss posted by the State Bank of Indore, which was acquired in August this year," said officials.
Interest rates
On the bank's position on interest rates, Mr O.P. Bhatt, Chairman, SBI, said, "The liquidity is tight and we think the credit growth will pick up, which indicated an upward bias of interest rates in the short term."
SBI expects an 18-19 per cent credit growth for the year and a 14-15 per cent deposit growth.
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