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The greatest bank of India operated the state the State Bank of India (SBI) has informed on 15 percent increase of net profit for the financial quarter finished on June, 30th 2008, despite higher interest rates, attributing increase to higher growth of the credit, the payment income.

SBI, which is India's largest commercial bank in terms of profits, assets, deposits, branches and employees, said its net profit (standalone) in June quarter of FY09 stood at Rs.1640.79 crore, up from 1425.81 crore reported in the corresponding period a year earlier (Year-on-year or YoY rise of 15.08 percent). However, its consolidated net profit (after minority interest) declined from Rs.1861.66 crore to Rs.1640.92 crore (YoY decline of 11.86 percent) due to drop in net profit of associate banks from Rs.520.70 crore to Rs.285.95 crore.The bank said its non-interest income more than doubled in the quarter under review - from Rs.1138.59 crore to Rs.2403.88 crore (YoY rise of 111.13 percent). Of this, core fee income rose by Rs.399.15 crore to Rs.1285 crore from Rs.885.85 crore (YoY rise of 45.06 percent).

SBI's total income during the period under review was Rs.16,203.07 crore as against Rs.12,229.09 crore (YoY rise of 32.49 percent). The bank's operating profit rose 67.79 percent (YoY) from Rs.2361.46 crore to Rs.3962.34 crore.The bank's savings account deposits swelled by 24.95 percent or Rs.1,12,197 crore, from Rs.4,49,660 crore reported in Q1 of FY08 to Rs.5,61,857 crore in Q1 of FY09. Current and savings account (CASA) deposits constituted 41.87 percent of total deposits at June 30, 2008 compared to 41.06 percent at June 30, 2007, the bank said. The bank's market share in deposits as on June 30, 2008, stood at 15.14 percent as against 15.17 percent as on June 30, 2007.

SBI's gross advances grew from Rs.3,44,834 crore to Rs.4,48,327 crore during the quarter under review (YoY rise of 30.01 percent). Market share in advances as on

On June, 30th 2008 reached in 15.61 percent in comparison with 15.60 percent as on June, 30th 2007. Wise a segment, on the basis of YoY, the middle of corporate advance payments grew for 30.79 percent, SME (the small and average enterprise), advance payments grew for 23.16 percent, advance payments of agriculture grew for 9.39 percent, internal loans grew for 17.40 percent, autoloans grew for 41.31 percent, loans of formation for 45.89 percent and the international advance payments for 46.17 percent. "The interest income on Advance payments has increased by 25.35 percent which are carried by growth," the bank has told.

However, during the June quarter, SBI's provisions rose 872.27 percent (YoY) from Rs.159.37 crore to Rs.1549.47 crore. Higher mark-to-market (MTM) provisions for Q1 of FY09 include Rs.784 crore on securities issued to Govt. of India in connection with the rights issue, the bank said.

The bank's net non-performing assets (NPAs) or bad debts also rose from Rs.5504.61 crore to Rs.6298.43 crore (YoY rise of 14.42 percent) during the quarter under review. The losses have been attributed to the US subprime mortgage crisis that snowballed into a global financial turmoil and lead to volatility in the stock and bond markets. The bank's capital adequacy ratio (CAR) at June 30, 2008 as per Reserve Bank of India's (RBI) revised guidelines on Basel II norms was 12.99 percent (including Tier-1 CAR of 9.25 percent), well above RBI's requirement of total capital adequacy of 9.0 percent, it said.

As on June 30, 2008, the total number of ATMs and branches of SBI and its subsidiaries stood at 5969 and 16,800 respectively. SBI said the government, which holds 59.41 stake in SBI, has approved the merger of State Bank of Saurashtra with its parent bank (SBI) to create a bigger banking entity in terms of size to take on competition ushered in by globalization. O.P. Bhatt, chairman, SBI, said the merger would be done within three months of the government approving it. The bank said it was aggressively growing overseas and increased its footprint in China by opening a 2nd office at Tianjin taking the total number of its overseas offices to 85 spread over 32 countries. The bank also enjoyed success in closing $3 billion syndicated term loan facility for acquisition of Jaguar-Land Rover for Tata Motors Ltd as joint mandated lead arranger.

SBI has been ranked at 57th place in the Top 1000 Global Banks list by Banker Magazine in July 2008, up from 70 last year. The bank has been ranked 8th among Top 10 Banks in Asia and is the only Indian bank to find place in the Fortune Global 500 List (2008) (380th place, up from 495th last year).