State Bank of India’s total provisioning is just Rs 1,705 crore less than the net interest income of HDFC Bank. India’s largest lender by assets State Bank of India on Friday last week reported dull third-quarter results in which the bank posted a net loss of Rs 2,416.37 crore mainly due to huge under-reporting of bad loans in the previous fiscal and a downturn in treasury operations. State Bank of India had reported a net profit of Rs 2,152 crore in the comparable quarter previous fiscal year. “The current quarter is definitely disappointing, but going forward, there is a lot of optimism. From April, we will all start on a positive note. I don’t want to sound very, very optimistic on the fourth quarter, neither very pessimistic,” Chairman Rajnish Kumar was quoted in a PTI report.
On the assets front, State Bank of India’s gross NPA ratio moved to double digits at 10.35% at the end of 31 December 2017 as against 7.23% at the end of 31 December 2016. More than Rs 25,000 crore of loans became non-performing in the latest quarter under review, mainly steered by the divergence of about of Rs 23,330 crore for the financial year 2017. Earlier in January last month, India’s largest private sector lender HDFC Bank reported a 20% rise in the net profit to Rs 4,642.6 crore followed by a marginal rise in gross NPA ratio.
Shares of State Bank of India witnessed a vertical decline following the first earnings reaction with the stock plunging as much as 3.84% to a day’s low of Rs 285 before closing down 2.67% at Rs 288.5 on BSE while the stock of HDFC Bank settled up 1.29% at Rs 1,876.55 before rising 1.67% at Rs 1,883.6 on Monday. On comparing the third-quarter financial statements of SBI and HDFC Bank, it was noted that the total provisioning of SBI is just Rs 1,705 crore less than the net interest income of HDFC Bank.
Q3 performance at glance: SBI vs HDFC Bank (Standalone Basis)
|Net interest income (Rs crore)||54,802.89||20,581.27|
|Net profit/(loss) (Rs crore)||-2,416.37||4,642.60|
|Total income (Rs crore)||62,887.06||24,450.44|
|Gross NPAs (%)||10.35||1.29|
|Gross NPAs (Rs crore)||199,141.34||8,234.88|
|Balance sheet size (Rs crore)||3,255,193.83||949,079.40|
|Reserves and surplus (Rs crore)||216,075.52||10,054,457.00|
|Capital Adequacy Ratio (%)||12.68||15.50|
|Earnings per share (Rs)||-2.80||17.90|
|Share price (Rs)||288.50||1,876.55|
|Market capitalisation (Rs crore)||249,034.75||486,414.00|
|Total provisions (Rs crore)||18,876.21||1,351.44|