SBBJ posts net profit of Rs 128 crore in Q1

JAIPUR: State Bank of Bikaner and Jaipur (SBBJ declared a net profit of Rs 128.04 crore for quarter 1 2011. This is an increase of 24.14% over the corresponding period in 2010 in which the bank had posted a net profit of Rs 103.14 crore. During fiscal 2010-11, the bank had posted an overall net profit of Rs.550.88 crore, registering an increase of 21 per cent from Rs.455.16 in 2009-10.

The bank has also announced to reduce its highest return on fixed deposits from 9.75% to 9.50 % per annum for deposits spanning 3 to 5 years. The interest on deposits above 5 years and up to 10 years has also been reduced from 9.75% to 9.30%. The bank has recently increased its base rate from 9.25% to 9.75%. “It seems that time has come for lower rate commitment on long term deposits. This combination would help us further improve our profitability,” said SBBJ managing director Shiva Kumar.

The bank has also shown improvement in net interest income and interest margin. “While the net interest income has improved from Rs 376.78 crore in Q-I of 2010 to Rs 492.70 this year, the net interest margin has improved from 3.04% to 3.42%. We will try to capitalize on robust results of Q-1 in rest of the financial year,” he said.

The bank has also shown a credit growth of 17.36% and deposit growth of 11.56%. It has also shown improvement in CASA ratio, which has gone up from 38% to 39% this year.

The biggest worry, however, for the bank is the rising non performing asset (NPA). The net NPA has gone up from 0.91% in Q-I of 2010 to 1.21% this year. “We have set up a loan tracking centre to follow up NPAs at all the 27 regional offices of the bank. We want to bring it down below 1% by the end of this financial year,” he said.