State Bank of India (SBIN) Q4 04/05 earnings summary

Executive summary

• FY04-05 operating profit rose 15.04% to Rs. 10,990.36 crore and net profit increased 16.94% to Rs. 4,304.52 crore, driven by higher net interest income and controlled operating expense growth.

• Credit expanded strongly, with advances up 28.14%; net NPA ratio improved to 2.65%, while capital adequacy fell to 12.45%.

Financial highlights

• Total income increased 3.87% to Rs. 39,548 crore; total expenditure rose 2.47% to Rs. 35,243 crore.

• Net interest income grew 24.66% to Rs. 13,944.62 crore; reported NIM rose to 3.39%, or 3.20% excluding one-time items.

• Non-interest income declined 6.47% to Rs. 7,119.90 crore, mainly on lower gains from investment sales; excluding those gains, it increased 17.75%.

• Consolidated net profit was Rs. 5,463.93 crore versus Rs. 5,531.10 crore; consolidated EPS was Rs. 103.82 versus Rs. 105.09.

Outlook and guidance

• Economic growth prospects were considered bright, supported by foreign investment inflows, rising equity markets and strengthening bank balance sheets.

• Priorities included change management, wider technology use, process redesign and staff redeployment and retraining to improve service quality and contain costs.