India’s biggest lender has seen its profits soar in the fourth quarter. After struggling for months with bad assets and a thinning capital base, State Bank of India has rebounded dramatically. Net profit rose 24% to Rs 4,050 crore compared to the previous quarter. And its loan book increased 14.5% to Rs 8.68 trillion compared to the year-ago period. SBI’s profits are not comparable on a year-on-year basis because it incurred large one-time costs in the previous year’s fourth quarter. But most other indicators were up as well. The bank’s net interest income jumped 45% to Rs 11,704 crore. But its net interest margin fell to 3.89% from 4.05%. On the bright side, net non-performing assets dropped to 1.82% from 2.22%. And SBI’s provisioning fell to Rs 2,836 crore from Rs 3,263 crore.
And moving to the economy, India’s rupee was battered all week, repeatedly falling to new record lows. Worries about the economy at homeand the euro zone crisis kept the currency weak despite suspected RBI intervention. Still, the rupee recovered some ground late in Friday’s trade to end at 54.44 to the US dollar.
And staying with the economy, inflation has accelerated in April, with prices of key items across the board going up. New figures show the wholesale price index rose 7.23% in April compared to the same period last year. In March it stood at 6.89%. Inflation in India remains persistently elevated despite slow growth and high interest rates. Much of the latest spike was driven by food and fuel prices. While manufacturing inflation for April rose just 5.1% that for food jumped up 10.50%. The situation with fuel and electricity was even worse- showing an 11% rise during the month.
Get up to speed with the top business stories from the week that was, from the state of the economy, to the latest corporate earnings
And in other news, private companies could soon find it much harder to acquire land for their projects. On Thursday, a parliamentary panel recommended strict rules that would not allow the government to acquire land on behalf others. The panel said all for-profit ventures should have to buy land in the open market. It added that agricultural land should not be acquired. And also said there should be no exceptions for infrastructure, mining, or SEZ projects. The parliamentary committee’s proposed rules are much stronger than those in the 2011 land acquisition bill, which exempted land acquisitions under various existing legislation like those for highways and SEZs.
Switching back to corporate news, Piramal Healthcare has announced the largest overseas acquisition by an Indian firm in about six months. On Wednesday the company said it was buying US-based Decision Resources Group, a provider of healthcare information. The deal is worth $635 million. Piramal Healthcare’s latest deal is in line with its strategy. Promoter Ajay Piramal has been trying to diversify the company for a couple of years now. Back in 2010, Piramal Healthcare sold its local formulations unit to American firm Abbott Laboratories for $3.7 billion.