State Bank of Bikaner & Jaipur held an analyst meet on 20 April post declaring its results for the quarter ended March 2012 and Financial Year 2011-12. Shiva Kumar, Managing Director, State Bank of Bikaner & Jaipur addressed the meet.
Highlights of meet:
▪ Bank has improved its Net Interest Income (NII) 25.5% to Rs 2221.4 crore in FY'12 as compared to Rs 1769.72 crore in FY'11. NII has increased 22.1% to Rs 621.52 crore in Q4FY'12 over Q4FY'11. Net profit increased 32.0% to Rs 247.88 crore in Q4FY12, while it rose 18.4% to Rs 652.03 crore in FY'12 as against Rs 550.88 crore in FY11.
▪ Operating profit increased 30.6% to Rs 1489.61 crore in FY'12 and 28.6% to Rs 481.41 crore in Q4FY'12, on y-o-y basis. The total provisions surged 42.1% to Rs 837.58 crore with 56.7% in provisions for loan losses to Rs 485.69 crore and 124.5% jump in provisions for standard assets to Rs 64.2 crore during FY12 over FY11.
▪ Bank's recorded robust credit growth of 19.74% at Rs 49986 crore for FY12 through a better asset management.
▪ Strong credit growth resulted in substantial improvement in the NIM of the Bank from 3.38% in March 2011 to 3.70% in March 2012.
▪ Share of current and savings accounts (CASA) in total deposits has declined to 37.35% at end March 2012 from 38.51% at end March 2012.
▪ Bank has improved its yield on advances from 10.30% in March 2011 to 11.51% in March 2012.
▪ Expense Ratio has dipped from 52.68% in March 2011 to 47.18% in March 2012, showing a strong improvement of 550 basis points.
▪ Bank has improved its deposit composition by reducing its bulk deposit from 16.60% in March 2011 to 15.29% in March 2012.
▪ Return on Assets (ROA) of Bank has improved from 0.96% in March 2011 to 0.99% in March 2012.
▪ Due to market conditions, both cost of deposit at 6.85% and yield on advances at 11.51% at end March 2012 have gone up. But Bank has shown an improved performance by a consistent increase in Interest spread, from 4.49% in March 2011 to 4.66% in March 2012.
▪ Bank has shown no increase in its gross NPA level in last six months through better monitoring and follow up of the stressed accounts. Bank had declared its NPA through system in September 2011, when it had gone unto Rs 1651.98 from Rs 835.40 cr in March 2011.
▪ Account Tracking Centre was set up at Jaipur to step up follow up of stressed accounts. The NPA level of the Bank has remained same at Rs 1651.47 crore at end March 2012.
▪ Gross NPA of the Bank had jumped from 2% at end March 2011 to 3.70% in September 2011 due to system driven declaration of NPAs, which has improved to 3.30% in March 2012.
▪ The Gross NPA comprises of Rs 734 crore to large industry, Rs 284 crore to SME, Rs 489 crore to agriculture and Rs 189 crore from retail.
▪ The sector wise NPA for bank stands at 16% for textiles, 11% for engineering, 8.5% for iron and steel, 9.4% for infrastructure and 7.8% for paper industry.
▪ Net NPA during this six month period also improved from 2.48% (Rs 1092.24 crore) at end September 2011 to 1.92% (Rs 945.41 crore) at March 2012. As of March 2011, the net NPA of the Bank was at 0.83% (Rs 341.33 crore).
▪ Banks total restructured assets were at Rs 2556 crore at end March 2012 compared to Rs 2168 crore at end March 2011. This includes Rs 1300 crore of loans given to Rajasthan State Electricity Board.
▪ Capital adequacy ratio of the Bank has significantly improved from 11.68% in March 2011 to 13.76% in March 2012, which comprised of Tier I capital at 9.76% and Tier II at 4.00%. During FY2011-12, Bank issued rights issue of Rs 780 crore for Tier I and raised Rs 500 crore by issuing 10-year bonds for Tier II. Bank has sufficient capital position for next three years.
▪ The priority sector advances of the Bank stood at 42.39% of the adjusted net bank credit, which is above the RBI bench Mark of 40%. Agriculture credit stood at 21.64%, again well above RBI Mark of 18%.
▪ On Financial Inclusion front, Bank achieved 100% achievement of 830 villages assigned to it. Bank has also become a Registrar for enrolling for Adhar, and achieved the target of completing 2 lakh enrolment assigned to it by UIDAI as on March 2012.
▪ Bank has taken a number of innovative steps during the year, which includes SMS Unhappy Service of complaint redressal and Car Loan in Ten Minutes and Home Loan in Twenty minutes.
▪ During March 2012, SBBJ launched it Online Government Business Branch, which aims at centralising salary payment of all Rajasthan State Government employees.
▪ SBBJ is launching it's National Back Office Centre in May 2012 in Jaipur. The same month, Bank is launching two other innovations, Kohinoor Royale Branch for ultra HNIs to take on private sector and foreign Banks and a Cross Selling Branch, a first of its kind in India to sell its Group products like Life Insurance, General Insurance, Credit Cards and Mutual Fund.
Roadmap for 2012-13
▪ No immediate plans to cut interest rates.
▪ Targets deposit as well as credit growth at 18% for 2012-13
▪ Expect operating profit to rise 25% during April-September 2012.
▪ Expect NIM to remain steady at 3.7% for next six months.
▪ Bank opened 48 branches in 2011-12, while it has proposed to open 50 new branches in 2012-13.