SBI net profit down 38% on higher provisioning

12 November, 2017, 02:41 | Author: Ellis Copeland
  • SBI Q2 profit slumps 38% YoY to Rs 1,582 crore as provisions more than double

Gross NPAs' ratio fell to 9.83 per cent from 9.97 per cent in the last quarter, while the net bad loan ratio decreased relative to the previous quarter to 5.43 per cent from 5.97 per cent.

The bank managed to stem its asset quality slide as fresh slippages declined by more than half.

The state-owned lender reported a net profit of Rs 1,581.5 crore in the second quarter against Rs 2,538.3 crore in the corresponding quarter a year ago.

Shares of SBI jumped 6.20 per cent to settle at Rs 333.20 on the BSE on Friday.

In absolute terms, gross bad loans rose to Rs 1,86,114.60 crore or 9.83 per cent from Rs 1,05,782.96 crore or 7.1 per cent, while net NPAs rose to Rs 97,896.29 crore or 5.43 per cent from Rs 60,013.45 crore or 4.19 per cent.

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Net interest income grew by 27.3 percent year-on-year to Rs 18,585.9 crore in Q2 despite tepid loan growth.

The bank is also witnessing good recoveries from retail and small and medium enterprises (SMEs) with its NPAs in retail declining to Rs 53,000 crore, of the total NPAs of Rs 1,86,115 crore. "The watchlist at the end of September quarter was down to Rs 21,000 crore, from Rs 24,000 crore as of June quarter 2017", Kumar said. The bank's deposits grew 10.3 per cent from Rs 23.79 lakh crore as of September 2016 to Rs 26.23 lakh crore as of September 2017. The year-ago numbers have also been restated after the merger.Its second-quarter profit was also helped by a stake sale in SBI Life Insurance, which listed last month. Announcing the results, SBI chairman Kumar said that the corporate loan book had shrunk because of deleveraging by corporates and shift in borrowing to bonds. The annualised slippage ratio declined to 1.85 per cent compared to 5.28 per cent during the June quarter.

The company had posted a net profit of Rs22.21 crore for the corresponding period of the previous fiscal, Novartis India said in a filing to the BSE.

Similarly, net NPAs rose to 8.84 per cent of net loans, from 8.59 per cent.

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