India's largest bank, State Bank of India (SBI), has made a liberal provision of Rs 2,727.88 crore towards non-performing assets (NPAs) for the year ended March 2003. With this, SBI has provided a whopping provision of Rs 4,880 crore in the last two years for NPAs (Rs 2,153.10 crore last year). This is more than the deposit base of some of the private sector banks in the country.However, the bank announced an impressive 27.69 per cent jump in its 2002-03 net profit to Rs 3,105 crore from Rs 2,431.62 crore in 2001-02. The operating profit of the bank for the fiscal stood at Rs 7,775.40 crore as compared to Rs 6,044.83 crore in 2001-02, recording a growth of 28.63 per cent, SBI chairman S. K. Purwar said in Kolkata.It’s not that whatever the bank has provided for in the previous years has been written off. If the bank is able to recover NPAs that it provided for, it can be written back, adding to the profits. The bank had made gross NPAs of Rs 15,485 crore for 2001-02.Purwar indicated that the sharp jump in profit in 2003 is also on account of net write-back of Rs 786.83 crore relating to provision on other assets which included write-back amounting to Rs 812.08 crore on account of recovery in security related to court cases of Harshad Mehta initiated stocks scam of 1991-92.During the fiscal to March 31, 2003, the total provisions stood at Rs 4,670.40 crore, out of which Rs 2,162.51 crore was the provision on taxes and Rs 2,507.89 crore was the other provision on contingencies. In the previous fiscal, SBI made a total provision of Rs 3,613.21 crore. “The board has recommended a dividend of 85 per cent for 2002-03 following encouraging financial results as against 60 per cent in the previous fiscal,” he said. The net profit is backed mainly by a 417 per cent rise in its treasury profit and 396 per cent rise in the profit on sale of investments. Its treasury profit went up to Rs 1,715 crore from the previous fiscal’s figure of Rs 332 crore. The profit on sale of investments increased to Rs 1,694.60 crore from the previous fiscal’s figure of Rs 341.85 crore.During the quarter under review, SBI’s total income increased to Rs 36,827.28 crore from Rs 33,984.57 crore.
