Bad loans hit SBI net by 67%

Mumbai, Feb. 11: Country’s largest lender State Bank of India ( SBI) on Thursday reported a massive 67 per cent fall in consolidated net profit at ` 1,259.49 crore in the quarter to December, joining its peers in cleaning up the book, and classified loans worth ` 20,692 crore as having turned bad.

SBI also warned of more pains in the March quarter to meet the RBI diktat to clean the books by the end of the fiscal year as the bank has only provided for about half of the accounts that are stressful.

The SBI Group had posted a profit- after- tax of ` 3,828.20 crore in the third quarter of the last fiscal. On a standalone basis, its profit dropped a massive 61.67 per cent to ` 1,115 crore from ` 2,910 crore due to increase in bad loans and the resultant higher provisioning.

However, in absolute terms the gross non- performing asset rose only 20 basis points to 5.10 per cent from 4.90 per cent, while net NPA rose just 9 basis points to 2.89 per cent. But total provisions rose 31 per cent to ` 8,483 crore from ` 6,477 crore. Net loan loss provision was up 58.93 per cent to ` 7,645 crore from ` 4,810 crore.

“We have been saying that there are a few large accounts where workouts are happening and if they happened then things should be alright and if not, then we need to probably classify them as NPAs,” SBI chairperson Arundhati Bhattacharya said.