State Bank of India Q1 net down by 25.3 % at Rs 2,512.4 crore
13 Aug 2011
State Bank of India, the country's largest lender, registered a decline of 25.3 per cent in its first quarter consolidated net profit to Rs 2,512.4 crore from Rs 3,365.2 crore a year earlier, SBI said in a filing to the Bombay Stock Exchange.
SBI's total income increased to Rs39,126 crore for the quarter under review from Rs32,808 crore a year ago.
The first quarter financial performance was weighed down by a substantial increase in provisions for non-performing assets (NPA) at Rs 2,781 crore as compared to Rs1,733 crore, a year ago.
SBI's standalone net profit also slipped by almost 45.6 per cent to Rs1,583.5 crore in the first quarter, against Rs2,914.2 crore a year ago, it said.
The bank's income increased to Rs27,731.6 crore in the quarter under review from Rs22,142 crore in the year-ago period, it added.
Recently SBI announced a 50 basis point increase in its base lending rate to 10 per cent from 9.50 per cent, thereby raising borrowing cost for home, auto and corporate loan customers. (See: SBI hikes lending rates by 50 basis points)
Yesterday, the Lok Sabha passed the State Bank of India (Subsidiary Bank Laws Amendment) Bill, 2009 that gives the government powers to manage the five subsidiaries of the State Bank of India (SBI), fix their authorised capital and appoint managing directors. (See: Lok Sabha passes bill to give control of SBI subsidiary banks to government)
Most Indian banks have their net interest decline on a sequential or year-on-year basis due to higher borrowing costs, but with banks passing on rate hike increases to its end users, the pressure on margins may decrease going forward.