Net profit of State Bank of Hyderabad falls 21%

During Jan-Mar 2013, net profit of State Bank of Hyderabad fell 21 per cent to Rs 379 crore compared to Rs 481 crore in the year-ago period.

For the full year 2012-13, net profit declined 3.70 per cent at Rs 1,250 crore (Rs 1,298 crore). Total business grew by 16.9 per cent to Rs 2,10,532 crore.

M Bhagavantha Rao, Managing Director of the bank informed media persons that higher provisions offset a 16.4-per cent increase in the net interest income at Rs 3,918 crore.

The bank took a calculated decision to have a lower profit but a healthy balance sheet with higher provision coverage ratio that is what has been prescribed by the Reserve Bank of India.

The net interest margin (NIM) was almost flat at 3.48 per cent (3.47 per cent). The net non-performing assets increased to 1.61 per cent from 1.30 per cent last year.

The NPAs were high in the commercial or corporate segment, accounting for 73 per cent of total NPAs in 2012-13.

The quality of banks’ loan to sectors such as roads, food processing, textiles, metal, paper and plastics deteriorated. In the current financial year, SBH would focus on lending to retail, micro, small and medium enterprises and agricultural sector while exercising caution in corporate lending, Bhagavantha Rao said.

The deposit and advances grew at 15 per cent and 18 per cent respectively. The bank plans to add 150 new branches to the existing network of 1558 branches and recruit 900 officers.