NEW DELHI, July 8: State Bank of India (SBI) is unlikely to go for consolidation of its associate banks this year as some issues are yet to be sorted out.
“Merger (of associate banks) is not immediate priority. It will not happen in the near future,” a senior SBI official said.
The merger may not happen at least during the year as many issues have to be sorted out, the official said, adding it could be a possibility next year.
SBI undertook first ever amalgamation of its associate State Bank of Saurashtra in 2008, followed by State Bank of Indore in August, 2010.
There are five associate banks of SBI. Two of them are fully-owned, State Bank of Patiala and State Bank of Hyderabad, while remaining three—State Bank of Mysore, State Bank of Travancore and State Bank of Bikaner and Jaipur (SBBJ) — are not 100 per cent owned. These three entities are also listed at stock exchanges.
Amalgamation of unlisted banks is easier compared to the listed entities. So, State Bank of Patiala and State Bank of Hyderabad could be next on the block.
During 2011-12, SBI posted nearly 200-time increase in profit at whopping Rs 4,050.27 crore for January-March period—the highest ever in its history—on a sharp fall in provisioning for bad loans.
SBI profits had taken a big hit in the same period of 2010-11 at Rs 20.88 crore on account of higher provisioning for bad loans and increased tax outgo.
For the entire fiscal ended March 2012, the net profit of the bank rose by 41.6 per cent at Rs 11,707.29 crore as compared to Rs 8264.52 crore an year ago.
The total income of the bank during the fiscal rose Rs 1,20,872.90 crore against Rs 97,218.96 crore in 2010-11.
Net interest income during the year rose by 33.10 per cent Rs 43,291 crore against Rs 32,526 crore.
Gross advances of the bank rose to Rs 8,93,613 crore at the end of March, 2012 from Rs 7,71,802 crore in the previous fiscal, registering an increase of 15.78 per cent.
Following the capital infusion from the government in the last week of March, the capital adequacy ratio of the bank rose to 13.86 per cent at the end of March 2012 against 11.98 per cent at the end of previous fiscal.
The government infused Rs 7,900 crore to shore up Tier-I capital to over 9 per cent. Tier I capital of the bank stood at 9.79 per cent at the end of March, 2012. With this, government holding in the bank stood at 62 per cent. (PTI)
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