SBI profit plunges 99%, NPAs cross ₹1 lakh crore as bad loans bite deeper
MUMBAI: State Bank of India, the country’s biggest lender by assets, on Friday reported a 99.7% plunge in consolidated net profit at ₹20.7 crore during the JulySeptember quarter, compared to the same period last year, as provisions for bad loans increased.
Standalone net profit (not including contributions from subsidiaries or associates) fell 35% to ₹2,538 crore during the second quarter, against the year-ago period, in line with estimates. Analysts had expected SBI to post a profit of ₹2,533 crore.
Provisions ( including funds set aside for bad loans) grew three-fold to ₹15,327 crore during the quarter under review, from ₹5,330 crore in the same period last year.
Gross NPAs as a percentage of total loans rose to 7.14% at the end of September, from 4.15% a yearagoand6.94%attheendofJune 30, 2016. In absolute terms, gross NPAs crossed the ₹1 lakh-crore mark to ₹1,05,782.96 crore, from ₹56,834.28 crore at the end of the second quarter of the previous fiscal, a nearly 100% increase.
SBI chairman Arundhati Bhattacharya said the bank’s watchlist (assets that are likely to turn bad) is currently at around ₹25,951 crore, and is likely to go down by ₹5,000-7,000 crore.
The NPA percentages look very much larger because of the denominator, that is, the book itself has not increased in as much as it had increased in the year-ago quarter... The slippages have happen mainly from the stressed lists. The amount which has come from outside the list is because of the fact that we have very many small accounts.”
The bank recovered ₹1,344 crore worth of loans in the quar- ter and upgraded ₹206 crore of loans. It also sold ₹15 crore of bad loan to asset reconstruction company during the reporting period.
Total income on consolidated basis, however, rose to ₹72,918.4 crore during the second quarter of the current fiscal, from ₹66,828.8 crore last fiscal.
The bank’s shares ended down 3% on the BSE on Friday.
Banks had stressed loans of $138 billion as of June 30,2016.
Meanwhile, Bhattacharya said that SBI have received deposits worth over ₹40,000 crore in the last two days after the government announced demonetisation of ₹500 and ₹1,000 banknotes.
“We will find more savers with this demonetisation move and that’s a big advantage for us. Cost of funds may ease and we may see reduction in interest rates,” Bhattacharya added.
On long queues at ATMs, she said: “The cash is drying up. But we are taking care. There is no need to panic. We have 50 days.”
WITH AGENCY INPUTS