Provisioning boosts SBM net 88%

Public sector lender State Bank of Mysore reported a spike in its second quarter net profit at Rs 145 crore, up 88 per cent from Rs 77 crore in the same period last year due to 52 per cent decrease in provision for debt and 20 per cent rise in interest income.

Provision for debts for the quarter ended September 30, 2012 was Rs 115 crore, compared to Rs 241 crore during the same period last year, even as provision coverage ratio was 69 per cent, as against 66.4 per cent last fiscal. Net non-performing assets stood at 1.92 per cent compared to 1.82 per cent as on September 30 2011, but down from 2.43 as on June 30, 2012. Bank MD Sharad Sharma said on Thursday that the bank’s net interest margin for the quarter under review was 3.31 per cent, up from 3.19 per cent for the same period last year. Interest income was Rs 1,490 crore for the quarter ended September 30, 2012, compared to Rs 1242 crore during the same period last year.

Sharma said the bank will post 20 per cent growth in deposits and about 16-17 per cent in advances for the full year. Deposits as on September 30, 2012 stood at Rs 50,921 crore, a 15 per cent growth on a year-on-year basis, while advances were Rs 41,138 crore (Rs 35941 crore as on September 30, 2011). CASA ratio was 32.42 per cent as on September 30, 2012 and bulk deposits comprised 25 per cent of the bank’s total deposits, Sharma added.

Fresh slippages during the current quarter were Rs 180 crore, compared to Rs 464 crore last year.

The bank reported an increase in cost of deposits at 7.36 per cent (6.84 per cent) and yield on advances at 11.82 per cent (11.31 per cent) as on September 30, 2012. The capital adequacy ratio was 11.84 per cent for the quarter under review, down from 12.87 per cent as on September 30, 2011. Sharma said the bank has no plans to raise funds during this fiscal.

On Kingfisher Airlines, he said, “We (lenders) can support only if they see equity infusion by its Chairman Vijay Mallya,” and added that the viability report of SBI Capital Markets on KFA will depend on Mallya coming up with proposals on fresh equity by promoters or from investors.

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