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Increased provisioning due to the changed RBI norms saw State Bank of Mysore's net profit dropped 42 per cent to Rs 64.28 crore for the quarter ended June 30, 2011, compared with Rs 111.39 recorded during the corresponding quarter last year. The bank's net interest income also fell marginally to Rs 382.28 crore (Rs 386.15 crore).
Higher provisioning
“We had an increase in provisioning after April, due to changes in RBI provisioning norms. That caused a substantial dip in net profits,” Mr Dilip Mavinkurve, Managing Director, State Bank of Mysore, told Business Line .
The bank's provision for non-performing assets 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.
Besides, the bank also made countercyclical provisioning buffer 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. Provisions and contingencies stood at Rs 145.12 crore during the quarter.
The bank's NPAs also increased, which Mr Mavinkurve attributed to “industrial changes”. While gross NPAs increased to 2.83 per cent (2.06 per cent), net NPAs stood at 1.42 per cent (0.75 per cent).
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