State Bank of India was beset by the mixed sentiment over its results, coming off after moving up on opening.

The scrip of the largest Indian commercial bank by assets and revenues inched lower by 0.3% to Rs 357.65 on BSE in about half-an-hour since opening. This contrasted with the Rs 361-362 levels achieved by the scrip in early trades. On Thursday, the scrip of State Bank of India (SBI) had closed at Rs 358.80. Around 5.4 lakh SBI shares were traded on BSE thus far.

SBI is currently near its lifetime high (of Rs 368.30). But volatility has marked the counter over the last few days, ahead of the results as well as after they were declared. The scrip lost 0.9% on Wednesday to Rs 352. On Thursday, the stock recovered, albeit in volatile trades, up 1.9% to Rs 358.80, following the announcement of results. The stock clocked a staggering volume of 46.9 lakh shares on that day.

Some degree of optimism has been generated in SBI on rumuors that the government is likely to raise FII ceiling in the bank by excluding the GDR holding (which is about 8% of total equity) from the overall FII ceiling of 20%.

SBI has reported improved operating results for FY 2002-03. The operating profit of the bank stood at Rs 7,775.40 crore compared to Rs 6,044.83 crore in 2001-02, recording a growth of 28.63%. The bank posted a net profit of Rs 3,105 crore for 2002-03 compared to Rs 2,431.62 crore in 2001-02, registering a growth of 27.69%.

The growth in profit in 2002-03 has been achieved through increases, both in net interest income and fee income. Profit on sale of iinvestments in 2002-03 was Rs 1,694.60 crore as against Rs 341.85 crore in 2001-02, and thus the increase under this head contributed to the growth in profit.

The bank witnessed improvement in key ratios. The return of average assets moved up to 0.86% from 0.73%. The return of equity improved to 18% from 15.9%. The net NPAs went down to 4.5% from 5.6%.

Net interest income was Rs 9,977.56 crore as against Rs 9,081.25 crore in the previous year, a growth of 9.87%. This was due to growth in both interest income on resources deployed in treasury operations as well as on advances. Cost of deposits (excluding Resurgent India Bonds/ India Millennium Deposits) witnessed a reduction from 7.07% in 2001-02 to 6.43% in 2002-03. Net interest margin was higher at 2.95% compared to 2.91% in the previous year.