SBI's record breaking jump in profits in FY00 - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

SBI's record breaking jump in profits in FY00

Jun 23, 2000

India's largest commercial bank State Bank of India (SBI) recorded a fantastic 100% YoY jump in its net profits to Rs 21 bn in FY00. Higher business volumes and better efficiency has enabled the bank to record increase in profits and higher margins of 9.2%.

(Rs bn) FY99 FY00 Change
Interest Income 191 222 16.2%
Other Income 33 36 8.7%
Interest Expenses 130 153 17.1%
Operating Profit (EBDIT) 61 69 14.3%
Operating Profit Margin (%) 31.7% 31.2%  
Other Expenses 59 63 6.8%
Provision & contingencies 24 22 -11.2%
Net Profit 10 21 99.6%
Net profit margin (%) 5.4% 9.2%  
Earning per share 19.54 39.01  

During the FY00, the bank has written back excess provisions of Rs 3.2 bn for investment depreciation. This has also contributed in increase in the profits. After excluding this provision the growth in the net profits stands at 70%. Non performing assets of the bank during the year declined to 6.4% of net loans against 7.2% in the previous year. The capital adequacy ratio of the bank is at 11.5%. The company plans to increase the ratio to 12% by augmenting its tier-II capital (through subordinate debt).

SBI has shortlisted 19 prospective partners for the planned 74:26 joint venture in insurance. It plans to foray into the areas of life insurance and pension management business. SBI's key strength are its powerful brand equity alongwith wide branch network base, extensive retail and corporate customer base, which will assure it a success in this business. The company also plans to enter the securities market and set up an information bureau in partnership with HDFC, Dun & Bradstreet and Transunion.

SBI has taken a decision to set up a 100% IT subsidiary which would make forays into e-commerce, e-trading and e-broking and also provide software solution for the banking industry. The company has planned to introduce net banking by the end of this year and would further increase its ATMs and number of networked branches.

At the current market price of Rs 230, SBI is trading at PER of 5.9 times its FY00 earnings with Price/Book value ratio of 1 times. The bank's valuations are comparatively lower than that of private sector banks. Once the bank adopts latest technology and lowers its NPA, the re-rating is on the card.

Equitymaster requests your view! Post a comment on "SBI's record breaking jump in profits in FY00". Click here!

  

More Views on News

India's Largest Bank, SBI Posts Record Profit in Q4 (Views On News)

May 22, 2021

All you need to know about the bank's latest financial results.

SBI Announces Quarterly Results (3QFY21); Net Profit Down 6.9% (Quarterly Result Update)

Feb 5, 2021 | Updated on Feb 5, 2021

For the quarter ended December 2020, SBI has posted a net profit of Rs 52 bn (down 6.9% YoY). Sales on the other hand came in at Rs 667 bn (down 1.4% YoY). Read on for a complete analysis of SBI's quarterly results.

SBI Announces Quarterly Results (2QFY21); Net Profit Up 51.9% (Quarterly Result Update)

Nov 6, 2020 | Updated on Nov 6, 2020

For the quarter ended September 2020, SBI has posted a net profit of Rs 46 bn (up 51.9% YoY). Sales on the other hand came in at Rs 668 bn (up 3.9% YoY). Read on for a complete analysis of SBI's quarterly results.

Union Bank of India Swings to Profit as Asset Quality Improves (Views On News)

Jun 8, 2021

Union Bank's share price up 2% post March quarter earnings.

PNB Reports Profit in March Quarter After Three-Way Amalgamation (Views On News)

Jun 8, 2021

Shares of PNB fell over 2% yesterday despite healthy quarterly results.

More Views on News

Most Popular

Hotel Stocks Will Reward Investors (Fast Profits Daily)

Jun 8, 2021

This is why I'm bullish on the hotel and hospitality sector.

My 'Unlock' Investments (Fast Profits Daily)

Jun 11, 2021

The best unlock investments you can make in the market.

The Most Visible Sign of India's Revival is on Two Wheels (Profit Hunter)

Jun 9, 2021

Investing in the best stocks could result in wealth compounding on a massive scale.

How I Discovered a 400-Year-Old Open Secret to Extreme Wealth (Profit Hunter)

Jun 11, 2021

Charlie Munger's open secret about investing success.

More

India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms

SBI SHARE PRICE


Jun 16, 2021 (Close)

TRACK SBI

COMPARE SBI WITH

MARKET STATS