SBH Q2 net down by 12.25% to Rs 232 crore on higher NPAs

HYDERABAD: Public sector lender the State Bank of Hyderabad's net profit for the quarter ended September 30, 2011 dipped 12.25 percent at Rs 232.04 crore compared to the corresponding period previous fiscal owing to the higher NPAs.

However, the bank's total income for Q2 grew by around 32.7 per cent at Rs 2821.9 crore compared to Rs 2,127 crore in the corresponding period last fiscal.

"The drop in the net profit is because of the increased provision the bank made owing to the increasing non- performing assets. This is because of the overall economic downturn and we hope to contain it at this level. There are NPAs in all sectors," SBH Managing Director M Bhagavantha Rao told reporters after announcing the results.

The total provisions and contingencies, apart from the tax provisions, were Rs 218.88 crore of which Rs 174.91 was for the NPAs. The net NPAs for the second quarter this fiscal stood at 1.92 per cent, while it was 0.64 percent in the same period last fiscal, he said.

Replying to a query on savings bank (SB) account rates post deregulation, Rao said the bank would take a call on the issue in current quarter.

"One percent rise in the SB interest rate would cost the bank Rs 182 crore," he added.

In the wake of Reserve Bank of India deregulating the SB rates, the banks are now now free to fix their savings bank rates on deposits above Rs 1 lakh, while below that amount it should be a uniform rate.

SBH currently offers 4 per cent interest on the savings bank deposits.