The State Bank of India, the country?s largest commercial bank, on Friday reported a 48% growth in net profit to Rs 6,729 crore for the year to March 31, 2008, shrugging off the derivatives crisis as it moved ahead.
Chairman OP Bhatt said he expected advances to increase by 25% in the current year after a 23.4% growth in 2007-08 to Rs 4,22,181 crore.
During the year, SBI had the highest growth among banks in home loans (18.73%), SME lending (26.3%), auto loans (30%). It also funded the most mergers & acquisitions for international operations.
?In India, there is no loss from derivatives. But there are customers who may be booking losses?and each and every one of them has been contacted to see if they need any help in restructuring or dealing with that loss,? Bhatt said. ?We are the only bank in the derivatives business that has not been threatened or sued by any of the customers who made losses,? he said.
In the overseas market, SBI has an exposure of $20 million in the sub-prime crisis, against its balance sheet of $200 billion. It has made mark-to-market provisions of $10 million.
?In addition to this, we have got an exposure of $800 million on various swaps and notes,? Bhatt said, and 100% are on Indian entities that are SBI?s borrowers.
On other fronts, SBI would be restructuring its loss-making credit card joint venture with GE, beginning by putting its own man in the CEO?s chair together with a dozen officers.
SBI has shortlisted two partners for its general insurance foray, and it expects to choose one by the month-end.
The bank reported a total income of Rs 25,716 crore for 2007-08, an increase of nearly 18% on the previous year?s figure.
Restricting the growth in operating expenses to 6.65%, the bank said it gained from higher employee productivity, mainly on account of a massive technology rollout.
Bhatt said he expected interest rate to be flat in the short term, since there is a huge liquidity overhang in the system.
?For at least one quarter or so, I don?t see any movements in interest rates on either side,? Bhatt said.
