State Bank of India (SBIN) Q4 03/04 earnings summary

Executive summary

• FY03-04 net profit rose 18.55% to Rs.3,681 crore; operating profit increased 22.87% to Rs.9,553.46 crore.

• State Bank Group net profit reached Rs.5,531 crore, up from Rs.4,199 crore; consolidated EPS was Rs.105.09 versus Rs.79.78.

• Growth combined higher net interest income, lower deposit costs and investment-sale gains; investment-sale accounting changes lifted reported profit by Rs.693.70 crore.

Financial highlights

• Total income rose 3.4% to Rs.38,073 crore and expenditure increased 2.0% to Rs.34,392 crore; net profit grew 18.6% to Rs.3,681 crore.

• Net interest income rose 12.11% to Rs.11,186.32 crore; NIM improved to 3.04% from 2.95%.

• Non-interest income increased 32.62% to Rs.7,612.46 crore, driven mainly by investment-sale gains and fee income; gains on investment sales were Rs.3,073.45 crore.

• Consolidated income increased to Rs.52,484.16 crore from Rs.49,254.53 crore; consolidated net profit rose to Rs.5,531.10 crore from Rs.4,199.01 crore.

• Assets grew 8.5% to Rs.4,07,815 crore; advances rose 14.64% to Rs.1,57,934 crore and investments increased 7.73% to Rs.1,85,676 crore.

Outlook and guidance

• FY04-05 priorities: overseas expansion, infrastructure lending, agriculture, SMEs, retail banking and technology upgrades.

• Planned overseas expansion included branches in markets with significant Indian communities; Sydney operations began in April 2004 and a third Bangladesh branch was planned.

• Infrastructure focus included power, telecom, petroleum, oil and gas, paperboards and hotels; retail growth priorities included housing, personal, education and car loans.

• Management cautioned that intensifying competition could narrow bank margins and pressure profitability, increasing the need for efficiency, risk-management capability and technology investment.