About State Bank of Travancore:
State Bank of Travancore, popularly known as SBT, is a subsidiary of the State Bank Group. The bank was established in 1945 as Travancore Bank Ltd. sponsored by the then Princely State of Travancore. Later on, State Bank of Travancore became a member of the State Bank Group, and it was also made an associate bank of State Bank of India following the SBI Subsidiary Banks Act 1959. SBT is the premier financial organization in Kerala with 831 branches and 1186 ATMs. It has a network of over 1,138 branches spread across the country, covering 16 Indian states. The bank was awarded with National Award for Excellence in MSME Lending and National Award for Excellence in Lending to Micro Enterprises for the Year 2011 – 12.
Rise in Net Profit earned by SBT in Q3:
With its improved performance, State Bank of Travancore has been able to gain a great increase in its net profit in the third quarter of the current financial year. It profits rate jumped 404% at Rs. 74 crore in the present financial year, which is actually the bank’s highest net profit recorded in the last six financial quarters.
There are many factors behind this tremendous net profit earned by State Bank of Travancore. According to Jeevandas Narayan, the managing director of State Bank of Travancore, this rise in profit was supplemented by reduction in SBT interest rates on funds, progress in profit on advances, incorporation of low-cost deposits (applicable for both current and savings accounts), and repossession of stressed assets. Also, there has been a conscious effort on the part of the bank to curb its expenses. Narayan also remarks that the ‘Debulking’ of deposits has played a major role in creating this turnaround. The bank pays off bulk deposits and deposit certificates of worth Rs. 4,000 crore during this quarter.
At the end of December, State Bank of Travancore’s capital funds reached at Rs 6,018.46 crore. In this respect, SBT was significantly helped by State Bank of India. SBI strengthened SBT’s capital funds by instilling Rs 385 crore through a preferential share allotment this year. State Bank of India currently holds 78.91% shareholding in SBT. This increased the capital-to-risk-weighted assets ratio of SBT to 10.10 % against 10.03% in the previous year. Also, SBT’s current and savings deposits have grown from 27.65% from the previous year to 29.31% in the current year. Likewise, the sale on investments has gathered Rs. 87 crore compared to Rs.31 crore in the last financial year.