State Bank of Travancore (SBT) FY15 net profit rose 10.25% to R335.53 crore against a net profit of R304.34 crore last fiscal. The board of directors has decided to pay a 50% dividend, as against 25% lat fiscal.
The Q4 net profit showed a massive surge of 295% to R192 crore from R49 crore. The surge was on account of reduction in interest expenditure, increase in other income, including treasury income, and a reduction in the gross non-performing assets (GNPA).
“Throughout the last year, our attention was focused on asset quality, which paid off in terms of better NIMs (net interest margins). It has improved from 2.1% to 2.3%,” said Jeevandas Narayan, SBT managing director.
The overall business of the bank stood at R1,60,984 crore factoring in R91,077-crore as deposits and R69,907-crore of advances. At R29,608 crore as of March 2015, SBT commands nearly one-fourth of the NRI deposit pie in Kerala banks. NRI deposits at the bank have been growing at 18.61% y-o-y despite the fluctuations in rupee-dollar value.
SBT net interest income rose 19.13% y-o-y. “The bank has been replacing high-cost deposits with retail deposits to cut interest costs. The future plan is to continue to aggressively push the retail deposits,” says S Adikesavan, CGM (commercial banking).
Responding to the issue of fairness of a public sector bank slapping user charges on ATMs, Adikesavan says, “SBT has been taking cognisance of the rising tide of customer anger over the public sector bank charging ATM user for more than five transactions a month and can convey the feedback to the decisionmaking groups of banks. At the same time, we are yet to see how commercial banking activity can afford giving free services,” he adds.
In the next fiscal, SBT targets business growth to the tune of R28,000-crore, comprising R18,000 crore in deposits and R10,000 crore in credit. As part of the expansion, another 100 branches and 200 ATMs will be set up. The bank is also speeding up its recruitment drive this year.
Asked if the expansion plan would mean fresh infusion of capital, SBT managing director doesnot completely rule out institutional private placement.