Friday, May 14, 2010

State Bank of India posted poor profit in Jan-March quarter

State Bank of India, in January-March quarter, posted a “worst-than-expected” profit. The largest lender in India saw a sharp 32% drop in its profit margin. This failure is caused by bad loans.

The bank posted a net profit of Rs. 18.67 billion compared to 27.42 billion at the same time last year. At MSE, prices of share went down 3% to Rs. 2460.

Total income of the bank increased 1.8% to Rs. 224.74 billion compared to Rs. 220.60 billion in the same time last year. Total income rose to Rs.859.62 billion against 764.79 billion at the same time last year.

Income from interest was Rs.17.65 billion against Rs.173.42 billion at the same time last year. The bank declared 300% dividend at the rate of Rs.30 per share with a face value of Rs. 10 for the fiscal year 2009-2010.

On a year-over-year basis, the net profit of the bank rose by 0.4% to Rs.916.60 billion against Rs.912.12 billion in the previous fiscal year.

According to the data of Reserve Bank of India, in late April, Bank credit in India grew an annual 17.1% as consumer confidence grew. In October, business and consumer confidence hit a low of 9.7% against 16.7% by the end of March 2009.

Last month, ICICI Bank, and HDFC Bank, two of the top private banks of India, observed a one third growth in profit and predicted a strong growth in loan demand.

Analysts expect that loan demand would further pick up in the first half of 2010/11 as industries would need to more funds to expand their businesses.

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