Country's largest bank State Bank of India (SBI) today reported a 13.6 per cent decline in stand alone net profit to Rs 3,241.08 crore for the quarter ended June 30 due to a spurt in bad assets in agriculture and SME sectors and around Rs 1,300 crore provisioning for foreign operations and pensions.
State Bank of India (SBI) had a stand alone net profit of Rs 3,752 crore in the same quarter last year.
Its total income increased to Rs 36,192.62 crore in the quarter from Rs 32,415 crore in the same period a year-ago.
SBI Chairman Pratip Chaudhuri, who will be hanging up his boots by September-end unless he gets an extension, attributed the rise in bad assets to the "unexpected stress emanating from loans to agriculture and small businesses and on the foreign operations due to interest spike in the US".
He was, however, hopeful of reversing losses in most of the sub-groups by the second quarter.
When asked whether SME and agri books will have the same bad asset run rate going forward, Chaudhuri said "the good monsoons should help reverse the trend".
"The profit was hit because of a Rs 576 crore provisions on investment depreciation for foreign operations triggered by a hardening of yields in the US treasury bills", he said.
Chaudhuri said another factor that adversely affected the bottom line was "the Rs 700 crore excess provisioning for employee pension which arose as a result of LIC increasing the average life expectancy by five years to 81".
The bank will take a hit of up to Rs 600 crore per quarter over the next three quarters on this front, the SBI chief said.
The fall in profit came in even as the bank made 19 per cent lower provisions at Rs 2,266 crore during the reporting quarter. Chaudhuri said agri and SME assets do not require higher provisioning.
SBI shares were battered on BSE as the stock lost 5 per cent intra-day