The Hindu : Business : State Bank net profit up 48% at Rs. 6,729 cr.

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State Bank net profit up 48% at Rs. 6,729 cr.

Indrani Dutta

Interest rates will remain flat in the short-term, says Bhatt

Pays 215%
dividend
Plans branch expansion

— PHOTO: ARUNANGSU ROY CHOWDHURY

RURAL FOCUS: O. P. Bhatt, Chairman, State Bank of India, flanked by S. K. Bhattacharyya (left), Managing Director, and C. Narshiman, Deputy Managing Director, at a press conference in Kolkata on Friday.

KOLKATA: State Bank of India on Friday reported a 48.2 per cent jump in its net profit for 2007-08 proposing a 215 per cent dividend for the year against 140 per cent paid in 2006-07, SBI Chairman, O. P. Bhatt, said.

Announcing the results, he said that while the net profit for the year touched Rs. 6,729 crore, that for the fourth quarter ended March 31, 2008, increased by 26.1 per cent to Rs. 1,883 crore. In 2007-08, its total business grew by Rs. 1,81,000 crore and the incremental business was larger than the total business of most private sector banks.

On interest rates, he said it would remain flat in the short-term as there was a liquidity overhang in the system. No upward movements were to be seen in deposit rates either.

S. K. Bhattacharyya, Managing Director, said agricultural advances grew by 24.6 per cent and international advances were up 50.4 per cent year-on year, making the bank the largest non-rupee provider of corporate syndicate credit to corporates. Deposits and advances grew by 23.4 per cent. Its market share in deposits has increased from 14.8 per cent to 15.4 per cent driven by low-cost deposits, he said.

While 954 branches were added in 2007-08 against a target of 1,000, this year SBI planned to expand its network by 2000, of which around 40 were set up in April. All the new branches would be on the CBS platform. At least 50 per cent of the new branches would be set up in rural to semi-urban locations and within two years, the bank would have 10,000 branches in this segment. Mr. Bhatt said the bank was now examining its international business to decide whether it should go for geographical expansion or introduce an expanded basket of products and people at its existing locations. It now has a network of 83 overseas branches. To a question on the merger of its subsidiaries, Mr. Bhatt said the sequence and pace of this would be decided by the merger of State Bank of Saurashtra, which would go through first. “We are now awaiting the approvals”, he said, adding that once this merger settled down well, all the mergers were likely to be put in place. The performance of its associates and subsidiaries has also been strong in 2007-08. SBI Life was one of the few private sector companies to make profits in 2007-08.

Credit card

On credit card business, Mr. Bhatt said a restructuring was under way and a new business strategy was being worked out. “We are working with our partners GE. Last 18 months has not been well,” he said. A loss of Rs. 150 crore is reported to have been made in 2007-08 and the bank has now decided to be more judicious in its norms, it was learnt.

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