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.