State Bank of India profits for the first time in three years

Kolkata, May 15 (ANI): The State Bank of India (SBI) has registered a 32 per cent drop in the net profits in the fourth financial quarter (Q4), which ended on March 31 this year.

The net income of the bank in Q4 this year has fallen from last year's impressive Rs. 27.4 billion to Rs 18.7 billion.

The reason cited behind the fall in profits is higher provisioning in the areas of pay-revision arrears, liquidity overhang and non-performing assets.

Alleviating fears of investors, Chairman of the SBI, Om Prakash Bhatt, however, said that despite the low profits, the bank was in a position to mobilise resources expand the base of the bank.

"During both this current quarter that we are talking about and the year that has gone past, if you look at all the performance parameters on the banking side, the bank has done very well," he added.

This is the first fall in profits that the bank has seen in the past three years.

However, the SBI has ended the financial year, 2009-2010, with a profit of Rs. 9,166 crore. This is higher than the Rs. 9,121 crore profit registered by the bank in 2008-2009.

"Our free income has gone up by 27 per cent. We are gaining market share in advances. Our cost of deposit is going down quarter after quarter. So in every parameter of banking, you will find that not only is the bank performing better than it did earlier, but is also performing better than the industry," said Bhatt.

Responding to the query on how the SBI would expand its services, Bhatt said, "We are building up enablers so that in the coming years, the bank would be even better positioned to take advantage as this economy goes up on to a higher growth cycle."

Driven by its gains, the SBI is planning to come up with a retail bond service worth Rs 200 crore, in the first half of the present financial quarter.

Speaking on the plight of investors especially in the export business, Bhatt said: "With regard to them, I think that they are not as getting hurt right now as they did by the recession or lower growth in the western economies that took place especially in the United States of America and Europe. This is because a bulk of our exports is to these areas." (ANI)