SBT H1 net down 18.25% on higher provisions

Thiruvananthapuram, Oct. 20: State Bank of Travancore has posted a negative growth of 18.25 per cent in net profit during the first half of 2011-12 compared to the corresponding year-ago period.

A meeting of the board of directors held here on Thursday took on record the performance of the bank during and up to the end of the second quarter.

HIGHER PROVISIONS

The net profit for the half-year stands at Rs 256.20 crore against Rs 313.40 crore for the half year ended 30th September 2010.

The net profit has been impacted by higher provisions for standard assets as mandated by the Reserve Bank as also because of further slippage of assets.

Gross NPAs stood at 2.84 per cent (2.02 per cent a year ago, adding 40.59 per cent) and net NPAs were at 1.77 per cent (1.17 per cent, up by 51.28 per cent).

But the excess provisioning also helped the bank meet the RBI requirement of achieving 70 per cent Provision Coverage Ratio by March this year.

Meanwhile, operating profit was up 9.06 per cent at of Rs.580.40 crore during the first half of this year against the year-ago position.

MODERATE GROWTH

The growth here too was moderate due to increase in interest expenditure from market-related rates and higher growth in deposits as compared to the growth in advances.

Net operating income has improved by 10.65 per cent to Rs 1,173.12 crore, while net interest income looked up 7.91 per cent to Rs.874.21 crore at the end of the first half year.

Net Interest Margin stood at 2.63 per cent, a trifle less than 2.86 per cent of September 2010.

COST OF DEPOSITS

Total non-interest income increased to Rs 298.91 crore as against Rs 250.02 crore during the corresponding period in the previous year. Higher profits from treasury operations boosted the non-interest income for the period.

The cost of deposits has increased to 6.56 per cent, 101 bps more than a year ago, while yield on advances has also improved by 110 bps to 10.54 per cent.

The Capital to Risk Weighted Assets Ratio (CRAR) stood at 12.18 per cent (under Basel II framework) as against 12.93 per cent a year ago. The regulatory minimum prescribed by the Reserve Bank is 9 per cent.