State Bank of India (SBI) on Wednesday reported a net profit of R2,375 crore for the three months to September 30, a 35% year-on-year drop, owing to higher provisions for bad loans and a mark-to-market loss on its bond portfolio due to a steep rise in yields. The bank expects its loan book to grow by 16-17% this year.
Chairman Arundhati Bhattacharya said at a press conference she was not comfortable sharing an outlook though she hinted there could be some more pain with few indications of an upturn. “The situation is very volatile as you know very well and therefore, I have said from the beginning that I’d rather wait for the long term than give a short-term outlook. I think more pain is there. We are not seeing indicators saying things are beginning to look brighter,” she said.
India’s largest lender showed a deterioration in asset quality as gross non-performing assets (NPAs) rose 5.44% sequentially to R64,206 crore. As a ratio of total assets, gross NPAs stood at 5.64%, up 8 basis points from the quarter ended June 30.
The net NPA ratio too was up 8 bps on a quarter-on-quarter basis at 2.91% of total assets. The bank restructured loans worth nearly Rs 8,585 crore during the July-September period and has a pipeline of Rs 6,000 crore which may be spread over the next two to three quarters, Bhattacharya said.
Fresh slippages during the quarter, however, fell to Rs 8,365 crore, as compared with Rs 13,766 crore in the April-June period. Of this, Rs 4,796 crore has come from the mid-corporate book.
Operationally, the bank had a strong quarter with net interest income for the three-month period rising 11.5% from a year ago to Rs 12,251 crore, supported by healthy growth in total advances of 19.18%, which stood at Rs 11,39,326 crore. The bank’s deposits stood at Rs 12,92,456 crore, showing a growth of 14% year-on-year.
Provisions for the quarter stood at Rs 3,028 crore, up 66% from a year ago. Of this, loan loss provisions were up 44% from a year ago at Rs 2,645 crore.
SBI also provided nearly Rs 700 crore during the quarter for the MTM hit it took on its treasury portfolio. As SBI chose to amortise its losses and spread the hit over the span of the year, it will be providing nearly Rs 700 crore in each of the October-December and the