State Bank of Hyderabad (SBH), the largest associate bank of State Bank of India, has for the quarter ended March reported a 43.18 per cent drop in net profit compared to the period a year ago.
Fresh slippages and higher provisioning pulled down the net profit to Rs.253.13 crore from the Rs.445.51 crore of the corresponding period of previous fiscal.
Provisions (other than tax) and contingencies were to the tune of Rs.538.41 crore or 250 per cent more than Rs.152.52 crore made in the comparable quarter.
Total income declined 5.75 per cent to Rs.3,907.08 crore (Rs.4,145.85 crore), according to the results announced here on Sunday.
Economic growth
Addressing presspersons, after CGM-Retail Banking V. Viswanathan, made a presentation on the results, and Managing Director Santanu Mukherjee explained that the performance was a culmination of various factors, from a less than desired economic growth, dumping in steel and textile sectors to reduced demand for Indian products.
The bank’s basic strength remained intact, he asserted, pointing to the over Rs.1,000 crore net profit registered in 2015-16, something not easy for many bigger banks.
The net profit was Rs.1,064.93 crore or 19 per cent less compared to Rs.1,317.13 crore in 2014-15. Total income in 2015-16 was Rs.15,632.78 crore, 3 per cent more over the previous fiscal’s Rs.15,148.82 crore.
The net NPA was Rs.3,743.18 crore (Rs.2,348.51 crore) or 3.37 per cent (2.24 per cent). Gross NPA touched Rs.6,590.91 crore (Rs.4,984.77 crore) or 5.75 per cent (4.59 per cent).
Healthy NIM
The Net Interest Margin, he said, was at a healthy 3-plus per cent. But for the additional NPA, it would have been better than the 3.15 per cent.
The bank, he said, would like to have 3.25 per cent NIM and 20-25 per cent growth in net profit in current fiscal.
On the strategy, he said the SBH wants to disburse more retail and SME loans.
The bank, which had shed Rs.9,000 crore of high-cost, bulk deposits thus reducing interest expenses, would maintain the focus on growing retail deposits.
A 17-18 per cent deposit growth could be expected this fiscal.
