Wednesday, August 15, 2012

State Bank of India maintains margin guidance of 3.75%


Mumbai, August 13: In an interview to CNBC-TV18, Pratip Chaudhuri,  Chairman of State Bank of India says, 9% of total midcap book of Rs 1.75 lakh crore is NPA. The bank maintains its margin guidance of 3.75%. State Bank of India‘s first quarter results disappointed the street. While net profit jumped 136% year-on-year to Rs 3,752 crore, investors were unnerved by the steep rise in non-performing assets. The bank’s net interest income for the quarter rose 14.6% to Rs 11,119 crore, as a 23% rise in borrowing costs ate into the profit margins. The bank’s operating income rose 10.5% year-on-year and operating profit, 13%.

The bank’s net NPA rose to 2.22% from 1.82% quarter-on-year. The bank maintains its margin guidance of 3.75% and Chaudhuri explains, “It’s a slightly fluctuating game, but I do not think there is still possibility of it dropping very substantially. It would not. This is the bottom and we maintain 3.75% guidance because what is core to our margin is our ability to procure savings bank account at an optimum price.” Going forward, he expects the credit growth to come mainly from the retail sector. Here is the edited transcript of the interview on CNBC-TV18.

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