HYDERABAD: State Bank of Hyderabad (SBH) net profit jumped more than two-fold to Rs 334 crore for the third quarter ended December 2014, as against Rs 119 crore during the corresponding period a year ago.
“Profitability will be maintained. The reason is we have structured our NPAs, we are trying to reduce our NPAs and bulk deposits are being reduced gradually. Similarly, our cost of deposits is coming down...for the current quarter and overall, we expect much larger profit,” said Santanu Mukherjee, Managing Director of SBH.
According to him, bulk deposits reduced by 28 per cent year on year. This along with increased return on equity contributed significantly to the bank’s profitability. The bank’s net interest margin increased to 3.26 per cent during the quarter under review as against 3.04 per cent the previous fiscal.
Owing to lower cost of deposits, the bank’s net income increased by 10 per cent to Rs 1,086 crore in December, 2014 compared to Rs 989 crore in December, 2013.
SBH, which embarked on an aggressive NPA recovery initiative reported a gross NPA ratio of 5.32% as on December, 2014, while net NPA ratio stood at 2.43 per cent.
“We have provided adequately with the provision coverage ratio at 61.90 per cent as on December, 2014 up from 54.5 per cent as on March, 2014,” he said.
Similarly, SBH’s capital adequacy ratio is at 11.65 per cent, much above the RBI benchmark of 11%, he said.
Its total business stood at Rs 2,22,089 crore at end of December 2014 - consisting of Rs 1,20,681 crore in deposits and total advances of Rs 1,01,408 crore. The credit deposit ratio was 84.03% as on December, 2014, up from 79.13% in December, 2013.
SBH had opened 81 branches between April and December, 2014, taking the total to 1,775, including 719 in Telangana and 391 in AP. Of the new branches, 19 were in unbanked rural centres.
To Raise Rs 400 cr Tier II Capital
SBH plans to raise tier II capital by the end of the current fiscal year. According to Mukherjee, the bank will raise anywhere between Rs 350 crore and Rs 400 crore before the end of March 2015. For the next financial year, he however, didn’t indicate the capital the bank proposes to raise.