SBI quarterly profit plunges by 99%

May 18, 2011 |

Correspondent

mumbai

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May 17: The country’s largest public sector lender State Bank of India reported a dip of 99 per cent in its net profit to Rs 21 crore, on standalone basis, for the fourth quarter of 2010-11 against a net profit of Rs 1,867 crore in the same quarter last year. This was due to higher provisioning for bad loans, pension cost and Rs 500 crore on account of provisioning for the teaser loans.

This provisioning had been resisted by the earlier chairman, Mr O.P. Bhatt who was at loggerheads with the RBI over this issue. Higher staff expenses of 13.53 per cent included gratuity provision of Rs 1,565 crore in FY 11 against Rs 46 crore in FY 10; pension provision of Rs 2,473 crore (Rs 1,998 crore) and pension liability on account of wage revision of Rs 7,927 crore.

For the entire year, however, SBI net profit declined 9.84 per cent to Rs 8,265 crore, as against 9,166 crore in 2009-10. Operating profits grew 38.29 per cent over last year’s 2.26 per cent. SBI chairman, Mr Pratip Chaudhuri, said the total provisioning went up by 82 per cent during the quarter. But he said it was one-time provisioning and would not appear again except for Rs 1,100 crore which would be made for counter-cyclical buffer over the next two quarters. He said the January-March tax outgo was up as deferred liability was brought forward as they did not want to do “sugar coating” on the deferred tax asset.

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