Buoyed by robust first quarter numbers, State Bank of India is aiming at 20

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per cent growth in net profit this fiscal.

"Quarter one was 25 per cent. We can do 20 per cent (this fiscal). That is what we would try to achieve...We will try to maintain this growth as far as possible," SBI Chairman O P Bhatt told PTI.

The 20 per cent growth in profit seems to be an ambitious task considering the profit growth was less than a per cent in the previous fiscal.

Fall in treasury income and rise in provisions among others pulled down SBI profit last year. The bank had recorded a meager 0.4 per cent rise in net profit at Rs 9,166.05 crore last fiscal.

The total income rose to Rs 85,962.07 crore compared to Rs 76,479.2 crore in FY 2009.

Notwithstanding an increase in its bad debts, SBI reported an over 25 per cent growth in net profit to Rs 2,914.20 crore in the first quarter ended June, 2010.

The rise in net profit was mainly due to a three-year high net interest income and a decline in the cost of deposits and savings.

Net interest income rose by 45.35 per cent during Q1, FY'11 compared to Q1 in FY 2010. Growth in net income was 4.30 per cent in June 2009.

Operating profit zoomed 66.97 per cent in the first quarter. It had declined 7.28 per cent last year.

The bank's advances grew 20.74 per cent to Rs 1.14 lakh crore and deposits 6.78 per cent to Rs 51,734 crore, leading to business growth of 12.62 per cent in the quarter to Rs 1.65 lakh crore.

Meanwhile, SBI raised its benchmark lending rate by 50 basis points and deposit rates by up to 150 basis points effective today.

While the increase in the benchmark prime lending rate to 12.25 per cent will make existing home, auto and corporate loans from the country's biggest lender dearer, the hike in deposit rates will ensure better returns for deposit-holders.

However, for new borrowers, the base rate, which became effective from July 1 this year, stands at 7.5 per cent. The base rate is the minimum lending rate below which loans cannot be offered.

As far as the revision in fixed deposit rates is concerned, SBI increased the interest rate by 150 basis points (1.5 per cent) to 4 per cent for term deposits of 15-45 days' tenor. The deposit rate increase is the maximum in this slab.

For fixed deposits with a tenor between 181 days and less than one year, the new interest rate will be 6 per cent against the existing 5.25 per cent, while 555-day fixed deposits will attract an interest rate of 7.25 per cent, an increase of 125 basis points.

The interest rate on term deposits of between 3 to 5 years' tenor will go up by 75 basis points to 7.25 per cent from tomorrow, while interest on the 5-8 years' maturity slab has been increased by 25 bps to 7.50 per cent.