• FINANCIAL RESULTS FOR THE YEAR ENDED 31ST MARCH, 2006
  “ SBM’s NET UP by 5.07% to Rs.216.72 Crores”
  The Board of Directors of State Bank of Mysore approved the financial results for the year ended 31st March, 2006 at its meeting held in Mumbai on 2nd May, 2006. The ‘Net Profit’ of the Bank registered a growth of 5.07% from Rs.206.26 crores to reach a level of Rs.216.72 crores . The ‘Operating Profit’ has marginally declined from Rs.451.66 crores in the previous year to Rs.437.86 crores in March, 2006, mainly on account of Treasury income by Rs.60.64 crores due to market conditions and higher depreciation of Rs.22.41 Crores incurred on the fixed assets consequent upon the migration to Core Banking during the year . The net profit for Q4 of 2005-06 was Rs.78.89 crores, up by 3.84% over that of Q4 of 2004-05 which was Rs.75.96 Crores. The operating profit grew by Rs. 99.03 Crores in Q4 of 05-06, up by 41.75% over that of Q4 of 04-05 which was Rs. 69.86 Crores. The Bank’s Board has proposed a dividend of 90% for the year 2005-06.

• KEY FINANCIALS: The Return on Assets has been maintained at a healthy1.23% and Return on Equity is 23.17 %. Net Worth of the Bank has grown to Rs. 927.35 crores from Rs.750.79 crores, representing a sturdy growth of 23.52%. The Bank’s Capital Adequacy Ratio (CAR) stood at 11.37% against the regulatory benchmark of 9%. Earnings Per Share (EPS) has gone up to Rs.602.00 from Rs.572.94 in March, 2005. The Book Value of a share has gone up to Rs.2,576 from Rs. 2,086 in March, 2005. Average ‘Business Per Employee’ has risen from Rs.203.54 lacs in March, 2005 to Rs.254.22 lacs in March, 2006. Net profit per employee has increased from Rs.2.16 lakhs to Rs.2.22 lakhs.

• OPERATING INCOME: During the year the Net Interest Income of the Bank has increased from Rs.550.84 crores to Rs.611.67 crores, registering a growth of 11.04%. Non interest income excluding Treasury has grown by Rs.27.29 Crores i.e growth of 11.90%. Higher commission and exchange earnings on Non-fund business and on Foreign Exchange transactions have contributed to this growth. However, income from Treasury operations has declined to Rs.90.57 crores in March, 06 from Rs.151 crores in March, 05. Despite this, the Operating Income of the Bank has improved from Rs.930.70 crores as on March, 05 to 958.23 crores as on March, 06.

• OPERATING EXPENSES: Operating Expenses increased from Rs.479.09 crores to Rs.520.37 crores as at the end of March, 2006 registering a growth of 8.62%. The growth is mainly attributable to the increased cost on technology initiatives, enhanced staff expenditure and expenditure incurred for improving ambience of branches.

• DEPOSITS: The level of aggregate deposits increased from Rs.13,342.98 crores in March, 2005, to Rs.16,188.53 crores in March, 2006 thus registering a growth of 21.33% (Rs.2,845.55 crores). This growth compares favourably with the growth rate registered by aggregate deposits of All Scheduled Commercial Banks (ASCB), which is at 16.90%. The cost of deposits declined from 4.96% in the previous year to 4.65% by March, 2006.

• ADVANCES: The advances of the Bank increased from Rs.9,124.50 crores to Rs.12,063.16 crores in March, 2006, registering a growth of Rs.2,938.66 crores (32.21%) during the year. In advances also, the growth rate achieved by the Bank, is higher than the growth rate registered by Total Advances of ASCB, which is at 29.90%.

• RETAIL SEGMENT ADVANCES: Greater thrust was laid on enhancing deployment in the retail segment during the year. Housing loans have become synonymous with mainstream banking and credit growth. Impressive performance was achieved in Housing loans which stood at Rs.1,323.43 crores (growth of 52.02%) and Educational Loans which stood at Rs.123.67 crores (growth of 56.80%). The Bank’s advances to Small Scale Industries sector have increased to Rs.808.21 crores from Rs.644.59 crores (growth of 25.38%) and to Small Business Finance from Rs.374.45 crores to Rs.406.43 crores (growth of 8.54%) as at the end of March, 06.

• AGRICULTURE FINANCE: Agricultural advances continued to receive high priority and have recorded a growth of 35.00% (Rs.429.78 crores) to reach a level of Rs.1,657.58 crores. In Karnataka, Bank’s advances to agriculture sector stood at Rs.1,562.63 crores and constituted 23.86% of the total advances of the bank in the State. Under the Special Agricultural Credit Plan (SACP), the Bank disbursed Rs.1,274 crores during 2005-06 as against Rs.806.08 crores disbursed in the previous year, achieving a growth of 58.06% against the stipulated target of 24%.

• SHGs: The Bank is actively participating in increasing credit linkage to Self Help Groups in Karnataka State and has covered 4,858 groups with a credit assistance of Rs.39.98 crores during the year, with a cumulative coverage of 11,013 groups and credit assistance of Rs.85.42 crores.

• PRIORITY SECTOR ADVANCES: Priority Sector Advances grew by Rs.1,169.61 crores and reached a level of Rs.4,493.08 crores, constituting 40.21% of Net Bank Credit against the benchmark of 40%.

• CREDIT DEPOSIT RATIO: The Credit Deposit ratio stood at 74.52%, as against 68.38% in March, 2005.

• INVESTMENTS: The investments of the Bank in Securities, Debt and Equity stood at Rs.5733.32 crores. With prudent management of the Investments portfolio, the Yield there on stood at 7.99% as on 31.03.2006.

• FOREIGN EXCHANGE BUSINESS: The Foreign Exchange turnover of the Bank improved commendably and reached a level of Rs.18,854.81 crores during the year, thus recording an increase of Rs.8,743.17 crores (86.47%) over the last year.
  Export credit stood at Rs.805.91 crores as against Rs.753.00 crores of the previous year, constituting 7.21% of Net Bank Credit.

• NPA MANAGEMENT: By efficient management of stressed assets, the Bank has been able to bring down its gross NPA level from Rs.415.37 crores (4.56%) in March, 2005 to Rs.398.13 crores (3.30%). The Provision Coverage Ratio stands at a healthy 77.61% as on 31st March 2006. The net NPA ratio has declined from 0.92% as on 31.03.05 to 0.74% as on 31.03.06. The Bank plans to reduce its net NPA ratio to less than 0.50% by the end of March, 2007.

• TECHNOLOGY INITIATIVES: All branches have been migrated to Core Banking Solution. Under CBS platform, all Branches are networked and this has enabled the customers to move from ‘Branch Banking’ to ‘Bank Banking’. Internet Banking including transaction based facility has been enabled in all Branches of the Bank. The URL of the Bank’s website is changed to ‘statebankofmysore.co.in from ‘mysorebank.com’.

• BUSINESS PROCESS REENGINEERING: Several Initiatives under ‘Business Process Reengineering’ in the Bank to provide more efficient services to the customers have been implemented. This follows as a corollary to technology upgradation. Various BPR initiatives launched during the year 05-06 have made a positive impact on the Bank’s business development. The Bank has rolled out introduction of ‘Grahaka Mitra’, ‘Drop Boxes’, in large number of branches of the Bank. The Bank has also started RACPC (Retail Assets Central Processing Cell) for processing Personal Segment advances and SECC (Small Enterprises Credit Cell) for processing Small Scale industries segment advances at Bangalore. A combined RASECC is also functioning at Mysore and Shimoga to cater to the needs of both Personal segment and SSI customers.

• REGIONAL RURAL BANKS: The two Regional Rural Banks (RRBs) sponsored by the Bank, viz; Cauvery Grameena Bank and Kalpatharu Grameena Bank, have combined net work of 202 branches. The combined deposits and advances of these two RRBs, as on 31.03.2006, stood at Rs.793.87 crores and Rs.605.58 crores respectively and profits as on 31.03.2006 stood at Rs.16.79 crores. It is proposed to merge the two Rural Banks into a single Bank as per Government of India guidelines.

• BRANCH EXPANSION: The Bank has opened ten (10) new branches during the year 2005-06. With this, the Bank’s network of branches stands at 641 spread over 15 states. As at the end of March 2006, the branch network comprises 152 Metro, 127 Urban, 151 Semi-urban and 211 rural branches.

• FUTURE PLANS: The Bank plans to improve operating profit and net profit, substantially, during the current year. With this aim in mind, the Bank has set for itself an ambitious business growth target of Rs.6,900 crores. The Bank will be observing the year 2006-07 as ‘YEAR OF CROSS SELLING’ by providing various financial products like life insurance, General Insurance, Mutual funds, Credit cards through all its branches. The Bank would continue its policy of credit and risk dispersal and greater thrust would be given to financing agriculture, Small and Medium enterprises, Retail trade and Personal segments.
  To achieve this, the Bank is focusing on the areas of
  • Increasing employee skills through better training facilities
  • Recovery of stressed assets
  • Thrust on retail business
  • Introduction of new products based on technology and new delivery channels with a view to improve operational efficiency and provide better customer service.

    
    

  BANGALORE 02.05.2006		Y.VIJAYANAND MANAGING DIRECTOR

State Bank of Mysore
H .O.: K.G.Road, Bangalore - 560009, INDIA
Phone: 91 80 22353901 to 22353909 ; 22353473.
Fax: 91 80 22384480