1. SBI Q2 net profit drops 38% to Rs 1,582; way below estimates

SBI Q2 net profit drops 38% to Rs 1,582; way below estimates

India's largest state-run lender, State bank of India reported a near 38% drop in net profit for the quarter ended September 30, 2017, even as the asset quality remained stable.

By: | Published: November 10, 2017 1:32 PM
State Bank of India registered a 37.7 per cent drop in net profit to Rs 1,581.55 crore for quarter ended September 30, 2017. (Image: Reuters)

India’s largest state-run lender, State bank of India reported a near 38% drop in net profit for the quarter ended  September 30, 2017. State Bank of India registered a 37.7 per cent drop in net profit to Rs 1,581.55 crore for quarter ended September 30, 2017, as against Rs 2,538.32 crore in the corresponding quarter last year.  This was way short of Rs 2,507 crore profit forecast by analysts polled in a CNBC TV18 survey. SBI made Rs 16,175.20 crore worth of provisions for non-performing assets, which was higher than Rs 12,125.26 crore provisions it made in June quarter and Rs 7,669.66 crore provisions in year-ago quarter. Notably, the asset quality remained stable during the quarter, as  gross non-performing assets (GNPA) as a percentage of gross advances reduced to 9.83% at the end of second quarter from 9.97 per cent in June quarter but rose on year-on-year basis. GNPA for the bank stood at 7.14 per cent in the year-ago quarter.

Explaining the provisions made during the quarter, Rajnish Kumar, Chairman of SBI said, “ We have made more than 50% provision for RBI and NCLT lists.” Notably, the provisions in the bank have more than doubled since the previous year. Sharing his outlook for the coming quarter, SBI Chief said that credit growth continues to be muted. Rajnish Kumar replaced Arundhati Bhattacharya, as the Chairman of the bank last month. This is the first quarterly earnings reported by SBI after his appointment as the chairman. Prior to this appointment, he was Managing Director — Compliance and Risk, and Managing Director and Chief Executive Officer of SBI Capital Markets Limited, the merchant banking arm of the SBI.

Yesterday, Rajnish Kumar had shared his outlook on cutting interest rates. “If you look at the bond yields, they have gone up in the recent past. So, I think there is limited headroom available for cutting down the interest rates, both deposit and lending,” SBI Chairman Rajnish Kumar told reporters here on the sidelines of the Bharatiya Yuva Shakti Trust’s (BYST) silver jubilee celebrations organised by industry chamber CII.

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