State Bank of Travancore (SBT) has witnessed a 53% fall in net profit in the first quarter, mainly owing to provisioning norms for mark-to-market (MTM) burnout. Against Rs 87.28 crore net profit in the first quarter of last financial, the bank posted Rs 41.12 crore in Q1 of 2008-2009. At the same time, a release after the meeting of the board of directors of SBT, here, maintained that at Rs 167.57 crore, the operating profit for Q1 of 2008-2009 has increased by 7.53%.
?Volatility in lending rates and provisioning for MTM losses were the main culprits,? a senior SBT official told FE, explaining the pressure on margins. ?About Rs 83 crore had to be booked in provision for fall in market value of government securities. At the same time, this does not reflect any cash outflow,? he added.
SBT?s interest income in Q1 of the current fiscal went up by 14%. But the non-interest income grew faster by 20%.
Its SME (small and medium enterprises) segment that contributed most to the bank?s business growth through a year-on-year growth of 25.28%, taking it to Rs 4,489.91 crore. For Q1, SBT had introduced a special scheme for technology upgradation in coir industry.
After moving to the Basel II framework, Capital to Risk Adjusted Assets Ratio (CRAR) of SBT as on June 2008 stood at 12.91% well above the RBI stipulation of 9%. The net NPAs of the bank as on June 2008 stood at 1.16%.
The total business grew by 17.22% to Rs 66,138 crore as on June 2008 from Rs 56,424 crore as on June 2007. Deposits have surged by 17.25% to touch Rs 36,851 crore. At the same time, the gross advances rose only by 17.17%.
