State Bank surges ahead despite melt down

Pradeep K Mishra, CEO State Bank of India, Chicago

CHICAGO: India based State Bank of India (SBI) with branches across the world has won many plaudits from international bankers, financial pundits, and writers for its sustained growth even during the global economic melt down.

The global economic down turn notwithstanding, SBI has registered an impressive growth during the  year ending March 31, 2009  and that has won  it world-wide plaudits and recognition for the bank, according to Pradeep K Mishra, Chief Executive  Officer Chicago SBI. In a talk to this paper, he pointed out that SBI is the only Indian bank to find a place in the Fortune Global 500 list - Up from 495 last year to 380 this year (+115) seventh highest gainer and moving in the rankings from 219th spot last year to 150th spot this year in the Forbes 2000 list of largest companies in the world.

"It is again the only Indian bank among the top 100 banks in the world. Ranked 8th in top 25 banks in Asia, it was awarded the "Bank of the Year 2008 - India" by the Banker Magazine, London," Mishra said.

Detailing some of the growth areas that SBI had during the year ending March 2009, he said that the  total business surge  measured in Indian rupees was at Rs. 3,30,899 crore in FY 09, including international business growth of Rs. 39,384 crore. This was made up with a deposits growth of 38.08%, advances growth of 29.88% and International Loans in USD terms from USD 14.49 Bn to USD 17.05 Bn (17.7%).

It is also worth noting that the Cost / Income ratio has notched a positive turn from 46.62% in March 08 to 49.03% in March 09. SBI continued its expansion horizontally with opening new branches in the country and world wide.

More than 800 new branches were added during the year with branch network crossing 11,500, including 93 branches overseas. The increase in branches has led to an increase in staff and there was an addition of 30,127 staff in FY 09.

The net non-performing assets to loans (advances) ratio is used as a measure of the overall quality of the bank's loan book.

The SBI NPAs remained under control with Gross NPA Ratio improving from 3.04% in March 08 to 2.84% in March 09 and Net NPA Ratio remaining stable 1.78% in March 08 and 1.76% in March 09.

Under Basel II, capital charges are linked with three risk categories, namely market risk, credit risk and operational risk. All risk exposures are converted to risk-weighted assets. Banks are required maintain a minimum capital adequacy ratio at 8% (i.e. Regulatory capital / Risk-weighted assets > 8%). As on 31 Mar 09, CAR under Basel II is above 14% (14.25%).

Profitability - Fy 09
The Net Profit of SBI increased by 35.55% to Rs. 9121.23 crore in FY 09
Net Interest Income (NII) increased by 22.63% during FY 09 to Rs. 20873 crore from Rs. 17,021 crore in FY 08.

Encouraging performance by SBI for the year ending March 2009 rather qualified it to bag a good number of recognitions and awards globally. Some of the awards and recognition besides mentioned earlier are:

• Best Executive award to the Chairman by Asia Money

• Voted as " The Best Domestic Provider of FX Services" (2nd year in a row) & " The Best Domestic Provider of Single Bank Electronic Trading Platform" By Asia Money

• Ranking in the banker top 1000 world banks improved to 57 from 70 as compared to the ranking of 2007;

• Awards by the "The Banker Magazine" for "Retail Core Banking" and "Overall Retail Technology Product". SBI is the only Indian bank to receive these awards

• Awarded "Best Bank" and "Most Preferred Home Loan" By Outlook Money Awards, 08

• Won "Most Preferred Bank" and "Most Preferred Brand for Home Loan" CNBC Consumer Awards, Sept '08 (third year in a row).

• Reputation Institute, US has ranked SBI 29th.

Mishra said that the Chicago branch too has participated in the general growth of the parent company and that it has improved its performance deposit-wise and profit wise.

Suresh Shah