Hindustan Times 3rd March 2014
NEW DELHI: The State Bank of India (SBI), the country’s largest
lender, which has witnessed a surge in its non-performing assets (NPAs) and a
fall in net profit, has embarked on a massive cost-cutting drive. There has been
a drastic rationalisation of perks enjoyed by the senior officials of the bank.
For example, until recently, officers of the bank could claim reimbursement
for two mobile phones.
But from now, they will be able to claim reimbursement only for one. Besides,
they have been asked to travel as infrequently as possible and opt for the
lowest fares and shortest routes.
“Earlier, we could take a circuitous route to go to a certain place but now, we have been asked to take the shortest route and go for the cheapest fares. The focus is on cost cutting,” a senior SBI official who did not wish to be identified told HT.
State Bank of India (SBI) has raised salaries by 47% from fiscal 2011 to December quarter FY14. In fact, SBI’s average salary per employee at Rs 10 lakh is 67% more than Rs 6 lakh paid by ICICI Bank.
In a report, IDFC Institutional Securities said SBI’s average employee salary has risen 47% over FY11 (after the impact of pay hikes), while its better performing private sector peer ICICI Bank’s average salary has declined 22% over the same period.
The report added that most of the sharp increase in employee costs for PSU banks has come after a hike in compensation levels in FY11 and also because part of employee compensation for PSU banks is directly linked to inflation indices.
For the three months ended December 31, 2013, SBI’s total payment to employees at Rs 4,512 crore was up 25.05% from R3,608 crore in the same period last year. SBI had reported net profit of Rs 2,234.34 crore for the quarter ended December 31, down 34% from a year ago, on higher bad loans and increased provisioning. The bank saw provisions worth Rs 3,429 crore for non-performing assets (NPAs) during the quarter, up 24% from a year ago.
“While ICICI has clearly been tightening its belt, SBI’s salaries are to some extent indirectly linked to inflation in the domestic economy, preserving the employee’s purchasing power over the longer term,” the report said.
A part of SBI’s salaries are in the form of long-term retiral benefits and, therefore, are not a part of take-home salaries. Retiral benefits were close to 22% of SBI’s employee costs in April-January period of fiscal 2014.
http://www.financialexpress.com/news/sbi-average-salary-at-rs-10-lakh-exceeds-icici-banks-by-67-per-cent/1230976
SBI Q3 net profit dips 34% at Rs 2,234 cr
State Bank of India on Friday posted a 34 per cent decline in net profit at Rs 2,234.34 crore for the third quarter ended December 31, 2013 on account of higher provisioning for bad loans.
The country's largest bank had a net profit of Rs 3,396 crore on standalone basis in the October-December quarter of 2012-13.
The total provisioning for non-performing assets rose to Rs 3,428.59 crore (Rs 34.28 billion) during the December quarter, up from Rs 2,766.18 crore (Rs 27.66 billion) in the corresponding period last fiscal, SBI said in a filing on the BSE.
Total income of the bank rose to Rs 39,061 crore (Rs 390.61 billion) during the third quarter from Rs 33,992 crore in the same period a year ago.
The gross non-performing assets, which represents portion of bad loans, stood at Rs 67,799.33 crore (Rs 677.99 billion) at the end of December, up from Rs 53,457 crore in the year ago period.
As of December 31, the bank's portfolio quality declined, with gross NPAs at 5.73 per cent of gross advances, as against 5.30 per cent a year ago.
Its net NPAs during the third quarter rose to 3.24 per cent, from 2.59 per cent in the period a year earlier.
On a consolidated basis, the SBI group net profit plummeted by 40 per cent to Rs 2,838 crore (Rs 28.38 billion) during the October-December quarter.
It was at Rs 4,648 crore in the year ago period.
Shares of SBI were trading at Rs 1,460.80, down 2.59 per cent in the afternoon trade on the BSE.
During the three quarters (April-December) of 2013-14, the bank's net profit on standalone basis declined by 27 per cent to Rs 7,850.43 crore (Rs 78.5 billion), as against Rs 10,805.76 crore in same period of 2012-13.
Its total income rose to Rs 1,12,493.42 crore (Rs 1,124.93 billion) in the nine months, from Rs 99,361.07 crore in the year-ago period.
“Earlier, we could take a circuitous route to go to a certain place but now, we have been asked to take the shortest route and go for the cheapest fares. The focus is on cost cutting,” a senior SBI official who did not wish to be identified told HT.
Arundhati Bhattacharya, chairperson of the bank, who took over
last year has decided to focus on reducing costs, sources within the bank added
SBI average salary at Rs 10 lakh exceeds ICICI Bank’s by 67 per cent
-Financial Express-5th March 2014
In a report, IDFC Institutional Securities said SBI’s average employee salary has risen 47% over FY11 (after the impact of pay hikes), while its better performing private sector peer ICICI Bank’s average salary has declined 22% over the same period.
The report added that most of the sharp increase in employee costs for PSU banks has come after a hike in compensation levels in FY11 and also because part of employee compensation for PSU banks is directly linked to inflation indices.
For the three months ended December 31, 2013, SBI’s total payment to employees at Rs 4,512 crore was up 25.05% from R3,608 crore in the same period last year. SBI had reported net profit of Rs 2,234.34 crore for the quarter ended December 31, down 34% from a year ago, on higher bad loans and increased provisioning. The bank saw provisions worth Rs 3,429 crore for non-performing assets (NPAs) during the quarter, up 24% from a year ago.
“While ICICI has clearly been tightening its belt, SBI’s salaries are to some extent indirectly linked to inflation in the domestic economy, preserving the employee’s purchasing power over the longer term,” the report said.
A part of SBI’s salaries are in the form of long-term retiral benefits and, therefore, are not a part of take-home salaries. Retiral benefits were close to 22% of SBI’s employee costs in April-January period of fiscal 2014.
http://www.financialexpress.com/news/sbi-average-salary-at-rs-10-lakh-exceeds-icici-banks-by-67-per-cent/1230976
SBI Q3 net profit dips 34% at Rs 2,234 cr
State Bank of India on Friday posted a 34 per cent decline in net profit at Rs 2,234.34 crore for the third quarter ended December 31, 2013 on account of higher provisioning for bad loans.
The country's largest bank had a net profit of Rs 3,396 crore on standalone basis in the October-December quarter of 2012-13.
The total provisioning for non-performing assets rose to Rs 3,428.59 crore (Rs 34.28 billion) during the December quarter, up from Rs 2,766.18 crore (Rs 27.66 billion) in the corresponding period last fiscal, SBI said in a filing on the BSE.
Total income of the bank rose to Rs 39,061 crore (Rs 390.61 billion) during the third quarter from Rs 33,992 crore in the same period a year ago.
The gross non-performing assets, which represents portion of bad loans, stood at Rs 67,799.33 crore (Rs 677.99 billion) at the end of December, up from Rs 53,457 crore in the year ago period.
As of December 31, the bank's portfolio quality declined, with gross NPAs at 5.73 per cent of gross advances, as against 5.30 per cent a year ago.
Its net NPAs during the third quarter rose to 3.24 per cent, from 2.59 per cent in the period a year earlier.
On a consolidated basis, the SBI group net profit plummeted by 40 per cent to Rs 2,838 crore (Rs 28.38 billion) during the October-December quarter.
It was at Rs 4,648 crore in the year ago period.
Shares of SBI were trading at Rs 1,460.80, down 2.59 per cent in the afternoon trade on the BSE.
During the three quarters (April-December) of 2013-14, the bank's net profit on standalone basis declined by 27 per cent to Rs 7,850.43 crore (Rs 78.5 billion), as against Rs 10,805.76 crore in same period of 2012-13.
Its total income rose to Rs 1,12,493.42 crore (Rs 1,124.93 billion) in the nine months, from Rs 99,361.07 crore in the year-ago period.
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