The Board of Directors of State Bank of Mysore approved the financial results for the year ended 31st March, 2010 at its meeting held in Mumbai on 20th April 2010. The highlights of the performance and working results are as under.

• NET PROFIT;
  The “Net Profit” of the Bank increased to Rs.445.77 crores from Rs.336.91 crores in the previous year registering a growth of Rs. 108.86 crores (32.31% as against 5.66% for the previous year). The net profit for the 4th quarter grew from Rs 49.84 crores to Rs 123.63 crores year on year, clocking in a growth rate of over 148%.

  The Bank’s Board has declared a dividend of 100% for the year 2009-10.

• OPERATING PROFIT:
  The Operating Profit increased to Rs.937.40 crores as on 31st March 2010 from Rs. 653.52 crores as on 31st March, 2009 representing a growth of 43.44% (15.15% for the previous year). The increase in Operating Profit is on account of growth of Rs.398.30 crores (from Rs 838.25 cr to Rs 1236.55 cr, at 47.52%) in Net Interest Income. (Operating profit saw a growth of over 60% on quarter on quarter basis, from Rs 181.31 cr to Rs 290.91 cr).

  Interest Income grew, year on year, by 9.60%, we were able to reduce the Interest Expenses by 3.60% by shedding high cost bulk deposits and borrowings, and, by increasing low cost Current and Savings Deposits during the year. The growth in Staff Expenses was contained at 8.01%, while other Operating Expenses increased moderately by 10.29%, year on year.
  

• KEY FINANCIALS:
  • The Return on Assets improved to 1.06% from 0.91% and Return on Equity was at 21.58% up from 20.16%.
  • Net Worth of the Bank (excluding revaluation reserves at Rs 591.89 cr) increased to Rs. 2021.73 crores from Rs. 1619.44 crores representing a growth of over 24%.
  • The Bank has been BASEL – II compliant since 31st March 2008 and Capital to Risk weighted assets (CRAR) under Basel II, is at 12.42% against the regulatory benchmark of 9%. Core CRAR was at 7.59%.
  • Earnings Per Share (EPS) improved to Rs.123.83 from Rs.93.59.
  • The Book Value of a share (Face value Rs 10)_ has improved to Rs.562 from Rs.449.
  • Business per Employee has risen from Rs.602 Lacs in March, 2009 to Rs.675 lacs in March, 2010.
  • Net Interest Margin (NIM) improved to 3.19% from 2.47%.
  • Cost of Deposits declined to 6.01% from 6.92%.
  • Yield on Advances declined to 10.33% from 10.68%.
  

• DEPOSITS:
  Aggregate Deposits increased from Rs.32388 crores in March, 2009 to Rs.38440 crores in March, 2010 registering a growth of 18.69% (Rs.6052 crores).

• ADVANCES:
  The total advances of the Bank reached Rs.29874 crores in March 2010, registering a growth of 15.43% over the previous year. In the absence of demand for credit from the corporate sector, the Bank focused on personal segment advances for its asset growth. These advances grew by over Rs 760 crores, clocking in a growth rate of over 19%. Within personal segment, housing loans grew by over Rs 400 crores and vehicle loans grew by over Rs 100 crores. The Bank has lent over Rs 3100 crores to MSE sector, Rs 3975 crores to Agriculture, Rs 2500 crores to housing, and 489 crores to Education. Education loans grew by over 25% during the year. The Bank has also achieved the Government of India (GOI) stipulated target of doubling SME credit (November 2008) well ahead of the deadline of March 2010 fixed by GOI. The Credit Deposit Ratio stood at 77.72% as at March 31st, 2010.

• AGRICULTURE FINANCE
  Agricultural advances continued to receive high priority and are at Rs.3975 crores. Bank’s advances to agriculture in Karnataka stood at Rs.3491 crores and constituted 25.76% of the total advances of the bank in the State. The Agriculture Debt Waiver and Debt Relief Scheme 2008 of Government of India have been implemented by the Bank. In terms of guidelines issued by Government of India, the farmers eligible for relief under Agriculture Debt Relief Scheme have been provided with an opportunity to settle their dues till 30th June 2010. An OTS within OTS Scheme to assist farmers and to enable them to avail benefit under the extended Debt Relief Scheme of the Government of India is currently in force.

  During the year, Bank implemented new loan schemes to assist farmers viz., Tractor Naveekarana (for renovation/repairs to tractors), Comprehensive relief measures to persons affected by natural calamities and Organic Coffee Scheme.
  8. OTHER NEW SCHEMES/ PRODUCTS INTRODUCED
  A. CORPORATE SALARY PACKAGE:
  The Bank also introduced “Corporate Salary Package”, a package offering a bouquet of benefits, depending upon the salary of the employees, without any minimum balance requirement. The scheme offers auto sweep facility, additional free cheque leaves, easy overdraft, concession in processing charges etc.

  SME SECTOR:
  While continuing all the existing products and schemes introduced to take care of the varying financial needs of the sector, the Bank has introduced during the year, three schemes viz., - SME Help, SME Care, and Micro Sector Collateral Free Loan to support SME sector. Micro Sector Collateral Free loan scheme provides for sanction of loans up to Rs.5.00 lacs, to these entrepreneurs without any collateral security. This limit would be increased to Rs 10 lacs shortly
  
  AWARDS
  
  A. MSME SECTOR-
  Government of India, Ministry of MSME has conferred to our Bank “National Award for Excellence in MSE Lending” and “National Award for Excellence in lending to Micro Enterprises” (amongst Associate Banks) for the year 2008-09. This special award is conferred to us in recognition of our creditable performance in lending to MSE sector and Micro Enterprises.
  
  B. AWARDS – FINANCING OF SELF HELP GROUPS
  The Bank has Credit linked 37454 groups with an advance amount of Rs.338 crores during the current year and taking the cumulative total of such credit linkage program to 1,16,040 groups with a financial outlay of Rs.897 crores up to 31st March 2010. These efforts of the Bank have been recognized and the Bank has been awarded the 1st Best Bank Award instituted by NABARD under the Commercial Banks Category for its performance under SHG Bank Linkage Program for the year 2008-09. The Bank has been the winner of either the 1st or the 2nd prize award since March 2000 continuously. The Bank’s Branch at Malavalli has also been selected as the best performer in SHG Financing amongst all the commercial bank branches in the State of Karnataka.
  
  NPA MANAGEMENT
  Gross NPA ratio stood at 2.00% and Net NPA ratio stands at 1.02%, as at March 2010. NPA coverage ratio including prudential write offs is at 66.93%.

TECHNOLOGY
The bank is fully on Core Banking Platform since 1st January 2006. The software provides for Anywhere Banking, Internet Banking, ATM, Real Time Gross Settlement, National Electronic Funds Transfer etc. The new functionalities introduced during the year under CBS include Mobile Banking Service.
Automated Teller Machines (ATMs): The Bank installed 227 new ATMs during this year taking the total number of ATMs installed to 608 of which 521 are in the State of Karnataka. Our ATMS are part of over 21465 strong ATM network of the State Bank Group. The card base has crossed 15.87 Lacs as on 31st March 2010. Paper less online ATM customer complaints reporting and redressing has been introduced through the Banks intranet to reduce the time gap between reporting and redressing of customer complaints relating to ATM transactions to adhere to the RBI guidelines on ATM customer complaints.

BRANCH EXPANSION

The Bank opened 15 (fifteen) General Banking Branches and one Centralised Processing Centre during the year. The last Branch opened during the year was at Muddenahalli, Chickballapur Taluk, the birth place of Sir M.Visveswaraya - the founder of the Bank, on 29th March 2010. The total branch network of branches as on 31st March 2010 stood at 689.

Financial Inclusion – Issue of Smart Cards:

To promote Branch-less Banking, Smart Cards have been put in place facilitating customers to transact banking business in remote places under the Business Correspondent Model. The Bank proposes to add 300 hand held machines to facilitate these correspondents. The Smart Card scheme has been introduced in Tumkur, Bellary, Chitradurga and Chamarajanagar districts and would be extending to other

FUTURE PLANS

The Bank proposes to reach a business level of over Rs.86,000 crores during the year 2010-11 aiming a growth rate of 26%, from the present level of Rs 68314 crores. The Bank has drawn up ambitious plans to open 100 new branches and install 182 additional ATMs during the financial year 2010-11. The Bank is in the process of adding more than 700 personnel to support its expansion plans.

It is our aim to emerge as the Bank of 1st Choice in Karnataka; to attract young and new customers and at the same time retain the existing customers. New IT enabled services and products are being introduced to suit the needs of all customers. The Bank is aiming to achieve a higher mindspace of customers to emerge as ‘MOST PREFERRED BANK’ in the state.

BANGALORE 21st April 2010		DILIP MAVINKURVE 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