Having posted a decline in profit for two successive quarters,
State Bank of India (SBI) hopes to clock an increase in its bottomline to Rs 2,500 crore in the second quarter on account of lower provisioning against bad loans.
"We expect to turn in another Rs 7,200 crore of operating profit. If you leave out the one-off provisions, which had happened due to raising of prudential norms and also the investment provision, we expect a normal provisioning of Rs 2,500-3,000 crore," SBI Chairman Pratip Chaudhuri said.
PSU STARS: State Bank of India rises above "So we would possibly look at a net profit of Rs 2,500 crore. This is broad indication, but we would get a number after we see August investments," he said.
During the first quarter, there was an unexpected event in the form of depreciation in bonds, which led to a loss due of Rs 1,048 crore. In addition, SBI suffered a Rs 300 crore loss on its equity investments, he said.
The bank also expects
Net Interest Margins (NIM) to be robust at over 3.5 per cent during 2011-12 on the back of a recent increase in lending rates by 50 basis points.
"NIM would continue upward of 3.5 per cent for the current fiscal," Chaudhuri said.
Hit by higher provisioning against bad loans and increased tax outgo, the country's largest bank had posted an about 99 per cent dip in profit to Rs 20.8 crore for the fourth quarter (January-March) of the 2010-11 financial year from Rs 1,866.60 crore in January-March, 2010.
SBI to raise $5 billion via offshore loans However, the situation improved slightly in the first quarter (April-June) of the current financial year, where the decline in net profit was limited to 46 per cent on an annual basis.
SBI reported a
45.6 per cent fall in standalone net profit to Rs 1,584 crore in the first quarter of the 2011-12 financial year from Rs 2,914 crore in the April-June quarter last financial year.
SBI's total Q1 income, however, increased to Rs 27,731.6 crore, from Rs 22,142 crore in the year-ago period.
The bank's operating profits grew by 18.06 per cent to Rs 7,242 crore during Q1, FY12, from Rs 6,134 crore in the first quarter of the previous financial year.
Chaudhuri said net interest income from core operations of the bank witnessed significant growth during the first quarter and has reached an all-time high level. Net interest income (NII) surged by 32.8 per cent to Rs 9,700 crore in the first quarter of FY'12 from Rs 7,304 crore in the corresponding quarter a year ago.
Special 
