SBI Q2 profit grows by 40 per cent

Beating projections, India’s leading financial conglomerate State Bank of India has posted 40 per cent growth in net profit for the second quarter of this fiscal on high interest income.

Crediting the good numbers to income from high interest rates and fee-based income, SBI Chairman O P Bhatt said bank has been giving good returns consistently in the last 5-6 quarters and growth has beaten projections by analysts.

SBI has posted a net profit of Rs 2,259.72 crore for the quarter, a growth of 40 per cent against 36 per cent in the same quarter a year ago. The bank’s profit in the September quarter last year stood at Rs 1,611.42 crore.

The total income rose to Rs 17,909.64 crore in the second quarter from Rs 13,658.22 crore a year ago, an increase of 31 per cent.

The bank registered a deposit growth of 67.93 per cent at Rs 57,861 crore. Its current and savings account (CASA) ratio was up by 26 basis points to 39.71 per cent. Advances of the bank grew by 162.35 per cent to Rs 51,020 crore.

Return on assets was flat at 0.99 per cent, while return on equity was at 14.64 per cent at the end of September 2008.

Besides, home loans grew by 23.47 per cent, auto loans by 30.48 per cent and education loan by 43.81 per cent.

SBI to launch new services from its Dubai center

State Bank of India (SBI) is set to expand its footprint in the Gulf, with an offer of brand new services for its clients in the United Arab Emirates (UAE). Armed with a Category 1 licence from the Dubai Financial Services Authority (DFCA), SBI will now be in a position to accept deposits, provide credit, arrange credit for investments, and offer advice on financial products. The bank will launch its new operations from its branch at the Dubai International Financial Centre (DIFC), a rapidly growing global hub for banking, capital markets, insurance, asset management and other financial services.

“Our services are open to all nationals as we are determined to acquire a more prominent niche as a global player in international banking circles,” said A. J. Vidyasagar, Chief Executive Officer of SBI’s branch at DIFC. He added that SBI, ranked fifty seventh globally, already had a natural advantage of servicing Indian clients involved with trading activity or investments in the Gulf.

Mr. Vidyasagar pointed out that the branch would provide working capital as well as trade finance, both fund based and non-fund based, term loans and project financing.

‘Fixed Maturity Plan 370 Days October 2008’ Launched by HDFC Mutual Fund

HDFC Mutual Fund house has begins initial offering period of HDFC Fixed Maturity Plan 370 Days October 2008 (1), a close ended income scheme under HDFC Fixed Maturity Plans-Series IX.

The face value of new issue is Rs 10 per unit and the NFO will be open for subscription on 16 October and close for subscription on 20 October 2008.

The investment purpose of the fund is to generate regular income through investments in debt, money market instruments and government securities. The scheme will invest 60%-100% in debt and money market instruments, with low to medium risk profile.

The Benchmark Index for the Scheme would be Crisil Short-Term Bond Fund Index, and it offers wholesale plan and retail plan with growth and dividend option.

Under retail plan, the minimum application amount will be Rs. 5,000 and in multiples of Re. 1 thereafter. However under the wholesale plan, the minimum investment amount is Rs. 1 crore and in multiples of Re. 1 thereafter.

The newly launched scheme will not levy entry load charged due to its close-ended structure. But it may charge 1.50% an exit load if the units are redeemed or switched out before maturity.

HDFC Mutual Fund has been one of the best performing funds in recent years. The sponsors of the fund are housing finance major HDFC AMC and British investment company Standard Life Investments.

As of March 2008, the total assets under management stood at Rs 62,747 crores, as compared to Rs. 36,421 crores in the previous year.

“Except SBI and HDFC, most credit card companies have already revised their interest rates at least twice within six months. Now, all of them will shy from increasing their interest rates again. However, in case of customers who’re paying on revolving credit basis and have missed their payments have been pushed to new slabs or in the existing slab, their rates have been increased. Also, the credit limit of many customers have been slashed” said a senior official of a credit card company.

While ICICI currently charges an interest rate within a slab of 1.5-3.75%, Citibank charges anything between 1.5 and 3.5%. Similarly, the current slab for Standard Chartered is between 2.49% and 3.40% per month. American Express vice-president (marketing) Amit Dutta said in their case, he doesn’t foresee any increase in rates or decrease in credit limit.

“Our revenues are based on high-spending card members who enjoy big credit limits. We’re not going to do anything that affects our customer base,” he said. The company already has an interest rate hovering around 3.5%.

SBI hikes deposit rate by 1 pc for 1,000 days maturity

Country’s largest lender State Bank of India today raised fixed deposit rate by 100 basis points to 10.50 per cent for 1,000 days maturity.

Deposit rates in between 2-3 year maturity has been revised to 12.50 per cent from 9.5 per cent, SBI said in a regulatory filing to the Bombay Stock Exchange.

For the same maturity senior citizens would get 0.5 per cent additional interest, it said.

Rate for other maturities have been kept unchanged at the previous level.

Shares of SBI were trading at Rs 1,392.75, down 2.89 per cent in early morning trade on the BSE.