State Bank of Mysore's net profit has dropped by 42%

By | June 16, 2011

A recent press report said that State Bank of Mysore’s has reported a fall in its net profit by 42 per cent to Rs 64.28 crore for the quarter ended June 30, 2011. Reports said that the fall in its profit was due to the increased provisioning. The bank’s net interest income also fell marginally to Rs 382.28 crore (Rs 386.15 crore).

Mr. Dilip Mavinkurve, Managing Director, State Bank of Mysore told the press that the bank had an increase in provisioning after April, due to changes in RBI provisioning norms which has caused a substantial dip in net profits. The bank has hiked its lending rates which has made its loans (home loan, personal loan, business loan, vehicle loan etc.) costlier to its borrowers.

Reports said that the bank’s provision for non-performing assets have increased by Rs 51.3 crore due to the changed norms, and it also made a provision of Rs 28.75 crore on restructured standard assets.

It has also made counter cyclical provisioning of Rs 15 crore as part of the buffer build-up to reach the provision-coverage ratio of 70 per cent; it is at 69.21 per cent currently.

Mr. Mavinkurve said that the gross NPAs have increased to 2.83 per cent from 2.06 per cent and the net NPAs stood at 1.42 per cent.

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About Pradeep Yuvaraj

Pradeep Yuvaraj is a Co-Founder and Director at Finerva Financial Solutions Private Limited, a financial education company focused on personal finance education. He has penned over 250 articles relating to Personal Finance and clocked over 500 hours of educating individuals on managing personal finance. He is a serial entrepreneur and has been associated with 7 Start-ups. His entrepreneurial experience spans industries as varied as Education, Gas Engineering, Automobile Design, Software development and more recently a Pure play presentation design company. Prior to turning entrepreneur in 2005, he has worked for 3 of the top ten companies of the world - Shell, ExxonMobil and Total SA. This experience included handling Branch Operations, Channel Sales and Business Development across 5 states over a period of 8 years. He holds an MBA from Symbiosis and an Electronics Engineering Degree from the University of Pune.

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