SBI logs 4% rise in Q3 net to Rs 3,396 cr as bad loans weigh

A A

fe Bureau: Mumbai, Feb 15 2013, 01:15 IST

The country’s largest lender, State Bank of India (SBI) posted a slow 4.08% year-on-year (y-o-y) rise in net profit to R3,396 crore in the three months to December on the back of weak net interest income (NII) growth. NII dipped 3.16% y-o-y to R11,154.46 crore owing to poor asset quality, pressure on yields and in part due to the transfer of pension funds to a trust. The SBI stock lost 1.8% on the BSE, ending Thursday at R2,214.35.

The bank’s asset quality deteriorated with both gross and net non-performing assets (NPAs) rising sequentially. While gross NPAs rose 15 basis points (bps) to 5.3%, net NPAs also rose 15 bps to 2.59%. The bank saw fresh slippages to the tune of R8,165 crore and made loan loss provisions of R2,766 crore. It has a loan restructuring pipeline of R3,700 crore for the quarter ending March 31.

Chairman Pratip Chaudhuri attributed the rise in NPAs to the economic slowdown, high interest rates and payments due from the government to contractors. Chaudhuri said the situation would improve in the January-March quarter as payments from government projects are expected to be cleared, improving the cash flows of contractors. Also, with a large number of mines being allowed to open, iron ore linkages to steel companies would improve, he added.

SBI’s net interest margins remained under pressure as it contracted sequentially from 3.77% to 3.72%. The yield on advances declined from 10.93% in December 2011 to 10.75% in December 2012, while the cost of deposits rose from 5.9%

... contd.

Ads by Google

Single Page Format

1 | 2 | Next

Quick View BSE Sensex rise 50 points on hopes of better IIP dataRupee declines by 13 paise against dollar in late morning SBI Q3 net profit rises by 4% as core income falls on higher provisioning on bad assets

Previous Story Banks form group to recover Kingfisher Airlines loans Next Story Sahara likely to face music from other regulators too

Reader's Comments| Post a Comment

Be the first to comment.