State Bank Of India 01 February 2006 LISTING AGREEMENT : QUARTERLY REVIEW OF FINANCIAL RESULTS FOR THE QUARTER ENDED 31ST DECEMBER 2005 In terms of Clause 41 of the Listing Agreement we forward herewith a copy of Quarterly results of our Bank for the quarter ended 31st December, 2005, which has been subjected to review by Auditors and duly signed. We enclose a copy of the Review Report of the Auditors. LIMITED REVIEW REPORT OF UNAUDITED FINANCIAL RESULTS OF STATE BANK OF INDIA FOR THE QUARTER ENDED 31ST DECEMBER 2005 We, the undersigned Auditors, have reviewed the accompanying statement of unaudited financial results of State Bank of India for the quarter ended December 31, 2005. This statement is the responsibility of the Bank's Management. 2. The financial results incorporate the relevant returns of 42 branches reviewed by us, 542 branches reviewed by the Bank's Concurrent Auditors, 10 Foreign Offices reviewed by Local/Concurrent Auditors (8 by Local Auditors and 2 by Concurrent Auditors) and unreviewed returns in respect of 8571 branches (including 15 Foreign Offices). In the conduct of our review, in addition to 42 branches reviewed by us, we have taken note of the review reports in respect of non-performing assets received from the Bank's Concurrent Auditors of domestic branches and local/concurrent auditors of foreign offices aggregating 552 branches/offices. This review covers 57.47% of the advances portfolio excluding outstandings of asset recovery branches and food credit advance of the bank. Further, this review also covers 55.97% of NPAs as on December 31, 2005 3. A review of interim financial information consists principally of applying analytical procedures for financial data and making enquiries from persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express an audit opinion. 4. Attention is drawn to Note No. 2 regarding change in the basis of valuation of certain investments and its resultant impact on the working results as described therein. 5. Based on our review conducted as above, nothing has come to our notice that causes us to believe that the accompanying statement of unaudited financial results has not disclosed the information required to be disclosed in terms of Clause 41 of the Listing Agreement including the manner in which it is to be disclosed, or that it contains any material misstatement or that it has not been prepared in accordance with the relevant prudential norms issued by the Reserve Bank of India in respect of income recognition, asset classification, provisioning and other related matters. B. M. Chatrath & Co., Khandelwal & Jain & Co., R G N Pries & Co., Chartered Accountant Chartered Accountant Chartered Accountants Sachidananda Krishnan Shivratan Agarwal P. M Veeramani Partner: M.No. 51626 Partner: M.No. 10418O Partner: M.No. 23933 G. S. Mather A Co., Vinay Kumar & Co., M. M. Nissim & Co., Chartered Accountants Chartered Accountants Chartered Accountant Ajay Mathur V. K. Agrawal Sanjay Khemani Partner: M.No. 82223 Partner: M.No. 13795 Partner: M.No. 44577 Laxmlniwas & Jain, Chaturvadi & Co., S K Mittal & Co., Chartered Accountants Chartered Accountants Chartered Accountants Laxminiwas Sharma S. N. Chaturvedi S. K. Chopra Partner: M.No. 14244 Partner: M.No. 40479 Partner: M.No 14907 Patro & Co., Kanwalia & Co., M Choudhury & Co., Chartered Accountants Chartered Accountants Chartered Accountants Jay Prakash Agarwala B. K. Kanwalia M Choudhury Partner: M.No. 60494 Partner: M.No. 7719 Partner: M.No. 3800 K. P. Rao & Co, Vardhaman & Co Chartered Accountants Chartered Accountants K Surya Prakash Abna Jain Partner: M.No. 18857 Partner: M:No. 15454 UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED 31ST DECEMBER 2005 STATE BANK OF INDIA (Rs.in crores) Quarter ended Nine months ended Year ended ------------ ------------ ------- Particulars 31.12.2005 31.12.2004 31.12.2005 31.12.2004 31.03.2005 (Reviewed) (Reviewed) (Reviewed) (Reviewed) (Audited) 1 Interest Earned (a) + 9558.15 8029.07 27285.85 23780.49 32428.00 (b) + (c) + (d) (a) Interest/ 4667.94 3442.42 12937.57 9576.02 13043.51 discount on advances/ bills (b) Income on 3289.09 3645.24 10661.16 11799.25 16027.67 Investments (c) Interest on 490.07 420.11 1479.72 1379.64 1787.04 balances with Reserve Bank of India and other interbank funds (d) Others 1111.05 521.30 2207.40 1025.58 1569.78 2 Other Income 1840.47 2238.00 4711.66 5429.26 7119.91 (A) TOTAL INCOME (1+2) 11398.62 10267.07 31997.51 29209.75 39547.91 3 Interest Expended 5338.27 4368.99 15204.78 13786.52 18483.38 4 Operating Expenses 3460.70 2508.11 8770.68 7356.95 10074.17 (e) + (f) (e) Payments to 2524.12 1690.07 6198.87 5057.92 6907.35 and provisions for employees (f) Other 936.58 818.04 2571.81 2299.03 3166.82 Operating Expenses (B) TOTAL EXPENDITURE 8798.97 6877.10 23975.46 21143.47 28557.55 (3) + (4) (excluding Provisions and Contingencies) (C) OPERATING PROFIT 2599.65 3389.97 8022.05 8066.28 10990.36 (A - B) (Profit before Provisions and Contingencies) (D) Provisions 469.81 1710.54 3053.93 2796.59 4468.76 and Contingencies (net of write-back) - of which provisions -102.56 791.56 144.18 1300.00 1204.00 for Non-performing assets (E) Provision for Taxes 1014.65 580.08 1414.74 2030.05 2217.09 - of which provisions for Fringe Benefit Tax (FBT) 12.00 31.00 (F) NET PROFIT 1115.19 1099.35 3553.38 3239.64 4304.52 (C - D - E) 5 Paid-up equity Share 526.30 526.30 526.30 526.30 526.30 Capital 6 Reserves excluding 23545.84 19704.98 23545.84 19704.98 23545.84 revaluation reserves (as per balance sheet of previous accounting year) 7 Analytical Ratios (i ) Percentage of nil nil nil nil nil shares held by Government of India (ii) Capital Adequacy 12.49% 12.66% 12.49% 12.66% 12.45% Ratio (iii) Earnings per 21.19 20.89 67.52 61.56 81.79 Share ( in Rs.) (not (not (not (not annualised) annualised) annualised) annualised) (iv) (a) Amount of 10960.90 12794.99 10960.90 12794.99 12456.25 gross non-performing assets (b) Amount of 4045.52 4812.65 4045.52 4812.65 5348.89 net non- performing assets (c) % of gross NPAs 4.41% 6.54% 4.41% 6.54% 5.96% (d) % of net NPAs 1.67% 2.56% 1.67% 2.56% 2.65% (v) Return on Assets 0.92% 1.00% 1.01% 1.01% 0.99% (Annualised) 8 Shareholding pattern a) Reserve Bank 314338700 314338700 314338700 314338700 314338700 of India ...No. of shares ... % of 59.73% 59.73% 59.73% 59.73% 59.73% shareholding b) Others .. .. 211960178 211960178 211960178 211960178 211960178 No. of shares ... % of 40.27% 40.27% 40.27% 40.27% 40.27% shareholding Unaudited Segment-wise Revenue, Results and Capital Employed (Rs.in crores) Quarter ended Nine months ended Year ended Particulars 31.12.2005 31.12.2004 31.12.2005 31.12.2004 31.03.2005 (Reviewed) (Reviewed) (Reviewed) (Reviewed) (Audited) 1 Segment Revenue (income) a Banking 9117.73 7832.80 25645.60 23825.49 32403.55 Operations b Treasury 4582.55 4962.57 13444.04 14921.10 20111.78 Operations Total 13700.28 12795.37 39089.64 38746.59 52515.33 Less : Inter 3264.00 3007.43 9072.75 10399.75 14132.91 Segment Revenue Net Income 10436.28 9787.94 30016.89 28346.84 38382.42 from Operations 2 Segment Results (Profit before tax) a Banking 1950.79 625.79 4366.09 2979.75 5404.63 Operations b Treasury -618.30 663.13 -1341.61 1692.91 1060.98 Operations Total 1332.49 1288.92 3024.48 4672.66 6465.61 Add : 797.35 390.51 1943.64 597.03 55.99 Unallocated income (net of unallocated expenses) Profit before 2129.84 1679.43 4968.12 5269.69 6521.60 Tax Less : Income Tax 1014.65 580.08 1414.74 2030.05 2217.08 (including FBT) Net Profit 1115.19 1099.35 3553.38 3239.64 4304.52 3 Segment Assets a Banking 427057.00 371366.06 427057.00 371366.06 427057.00 Operations b Treasury 216956.54 203745.14 216956.54 203745.14 216956.54 Operations c Unallocated 3984.33 4067.04 3984.33 4067.04 3984.33 Less : 188115.00 171362.96 188115.00 171362.96 188115.00 Eliminations Total 459882.87 407815.28 459882.87 407815.28 459882.87 4 Segment Liabilities a Banking 404730.11 353095.50 404730.11 353095.50 404730.11 Operations b Treasury 215211.31 201784.76 215211.31 201784.76 215211.31 Operations c Unallocated 0.00 0.00 0.00 0.00 0.00 Less : 184130.69 167296.26 184130.69 167296.26 184130.69 Eliminations Total 435810.73 387584.00 435810.73 387584.00 435810.73 ( Segment Assets and Liabilities are as on 31st March of the previous year ) STATE BANK OF INDIA Central Office, Mumbai 400 021 Notes : 1. The working results for the quarter ended 31st December 2005 have been arrived at after considering provisions for NPAs, Gratuity, Pension, Leave Encashment, Investment Depreciation, Income Tax (after adjustment for deferred tax), Wealth Tax, Fringe Benefit Tax (FBT) and Other Contingencies on an estimated basis 2. Investments in Regional Rural Banks (RRBs) were hitherto accounted after netting off provisions held pursuant to losses incurred by RRBs in proportion to and not exceeding the Bank's investment. From the current financial year, these investments have been valued at cost, which is in line with the RBI guidelines. Consequently, the profit for the period is higher by Rs. 86.86 crores (accounted for in Q1 of 2005-06). 3. Interest Earned-Others includes an amount of Rs.1665.75 crores for the period ended 31.12.2005, being interest on refund of Income Tax (Rs.711.90 crores accounted for in Q1 and Rs.953.85 crores accounted for in Q3 of 2005-06) 4. Other Income includes an amount of Rs.531.54 crores being Exchange Gain on India Millennium Deposits (IMDs) Redemption, and the Interest Expended has been netted off by an amount of Rs.563.52 crores being refund of Maintenance of Value from RBI. 5. Payments to and provisions for employees, under Operating Expenses includes an amount of Rs.312.87 crores, being arrears of salary paid for the previous financial years. 6. An amount of Rs. 128.00 crores, being the write back of provisions rendered surplus (other than advances, investments and investments in subsidiaries and joint ventures), is netted under the head Provisions and Contingencies (accounted for in Q2 of 2005-06). 7. During the quarter, the Bank has invested an amount of US$11,627,895,19 (equivalent to Rs.53.40 crores) in Indo-Nigerian Bank Ltd. (INBL) increasing its stake from 51.59% to 72.95%. This investment was made as part of a scheme of merger of INBL with 4 other local banks to form Sterling Bank PLC (the merged entity), in compliance with Nigerian regulatory requirements. State Bank of India has a stake of 9.24% in Sterling Bank PLC (the merged entity). INBL has ceased to exist after 31.12.2005 8. During the quarter, the Bank has paid Rs.309.24 crores to the Government of India, being its share (25%) of the consideration for purchase of UTI Asset Management Company Pvt. Ltd. 9. As per RBI guidelines to increase the general provisioning requirement for Standard Assets in the global loan portfolio (excluding direct advances to agriculture and SME sector) to 0.40 percent the Bank has made an additional provision of Rs.112.00 crores. 10. The figures of previous periods have been regrouped / rearranged, wherever necessary, to correspond to current period's classification. The above results have been taken on record by the Central Board of the Bank on the 28th January 2006 and were subjected to Review by the Auditors. T. S. BHATTACHARYA A. K PURWAR Managing Director & GE (CB) Chairman In terms of our Review Report of even date. B. M. Chatrath & Co., Khandelwal Jain & Co , R G N Price & Co G. S. Mathur & Co,. Chartered Accountants Chartered Accountants Chartered Accountants Chartered Accountants Vinay Kumar & Co., M. M. Nissim & Co., Laxminiwas & Jain Chartered Accountants Chartered Accountants Chartered Accountants Chaturvedi & Co,, S K Mittal & Co., Patro & Co., Kanwalia & Co,. Chartered Accountants Chartered Accountants Chartered Accountants Chartered Accountants M Choudhury & Co., K. P. Rao & Co., Vardhaman & Co., Chartered Accountants Chartered Accountants Chartered Accountants Mumbai 28th January 2006 This information is provided by RNS The company news service from the London Stock Exchange