Low year-ago base and turnaround in key parameters help improve performance
THIRUVANANTHAPURAM, FEBRUARY 2:
Low year-ago base helped the State Bank of Travancore (SBT) ramp home with a 404 per cent rise in net profit to ₹74 crore during the December quarter. Jeevandas Narayan, Managing Director, told newspersons here that a turnaround in key operational parameters also helped improve Q3 performance.
These included, among others, a reduction in the cost of funds, improvement in yield on advances, consolidation of low-cost deposits (current and savings accounts, CASA), and recovery of stressed assets. There has also been a conscious effort in curtailing overheads as reflected in the 1 per cent reduction in total expenditure from year-ago levels.
‘De-bulking’ of deposits also played a major role in improving the turnaround. According to Narayan, bulk deposits and certificates of deposit worth ₹4,000 crore had been repaid during the quarter.
CASA deposits have grown from 27.65 per cent from year-ago levels to 29.31 per cent. Fall in yields translated into treasury gains as well. Sale on investments had realised ₹87 crore (₹31 crore a year ago). The capital stood at ₹6018.46 crore at end-December 2014. State Bank of India, which holds 78.91 per cent of SBT’s equity, had infused ₹385 crore through a preferential share allotment this year. This boosted the capital-to-risk-weighted assets ratio to 10.10 per cent under Basel III framework against 10.03 per cent a year ago.
This apart, SBT has filed an application with SEBI for a rights issue, Narayan said.