State Bank of India shares soared over 9 per cent on Friday after the lender reported 66 per cent fall in net profit figures for the quarter ended March 2016 which was in line with market expectations.
SBI registered 66 per cent slump in standalone profit to Rs 1,263.81 crore for the fourth quarter of last fiscal ended March 31 as
it more than doubled the provisions for bad loans. It had reported net profit of Rs 3,742.02 crore in the corresponding quarter last year.
Its provision towards bad loans alone were raised to Rs 12,139.17 crore during last quarter of 2015-16, up from Rs 4,985.83 crore in the year-ago period. Overall, Rs 13,174.05 crore was parked towards provisions as well as contingencies during the quarter, as against Rs 6,943.31 crore in the same quarter of 2014-15.
On the asset front, SBI’s gross non-performing assets (NPAs) or bad loans rose to 6.5 per cent of gross advances as of March 2016, from 4.25 per cent a year ago. Likewise, net NPAs were 3.81 per cent (Rs 55,807.02 crore) of net advances as of March 31, 2016 as against 2.12 per cent (Rs 27,590.58 crore) a year ago.
Siddharth Purohit, senior equity research analyst, banking, Angel Broking, said, “SBI reported net profit of Rs 1263.4 cr which was more or less in line with expectations, however other income has been higher due to exchange gain on repatriation of funds from foreign office to India, in the absence of which the bottom-line could have disappointed. Gross slippages for the quarter stood at more than Rs 30,000 crore which is higher than what the street and we were expecting. However, the good part is that the bank is recognising the troubled assets and cleaning up the balance sheet.”
The share price of SBI closed 9.15 per cent up at Rs 201. The scrip opened the day at Rs 184 and touched a high and low of Rs 202.40 and Rs 181.50, respectively.