State Bank of Bikaner piles up big NPAs

NEW DELHI, June 14: The State Bank of Bikaner and Jaipur, the SBI associate bank, today reported huge non-performing assets of Rs 310.02 ...

NEW DELHI, June 14: The State Bank of Bikaner and Jaipur, the SBI associate bank, today reported huge non-performing assets of Rs 310.02 crore for 1998-99 because of defaults from its large accounts.

The bank has not disclosed which large accounts have turned into NPAs but expressed the hope that its asset quality would improve next year.

The bank’s NPA is slightly less than one-third of its total income of Rs 1013.48 crore. Its operating profits of Rs 162.12 crore were also lower than the last year’s figure “owing to increase in operating expenses”. The bank has put the blame on the overall industry scenario and the impact of wage settlement. However, its net profits managed to show a marginal hike from Rs 90.48 crore to Rs 91.88 crore.

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Despite a setback in the operating profits and huge NPAs, the bank has decided to maintain a dividend of 30 per cent, subject to the RBI approval.

While the State Bank of Bikaner and Jaipur registered an impressive hike of 18.63 per cent in deposit mobilisation, its credit deployment was rather poor showing an increase of only 4.93 per cent.

Announcing the results, managing director S K Mukerji said that to meet the challenges of increased risks “associated with the liberalisation of Indian financial market and deregulation of interest rates”, it has put in place an asset liability management system.

He said the bank’s priority sector lending has reached an all-time high of Rs 1908.53 crore constituting 48.39 per cent of the net bank credit. Its capital adequacy ratio has improved from 10.65 per cent to 12.26 per cent.