SBI net profit shrinks 35%

State Bank of India’s (SBI) net profit fell 34.56 per cent for the quarter ended September 30 to Rs.2,538 crore, as a provision for loan loss doubled to Rs.7,670 crore.

The total provision of the country’s largest lender increased 36 per cent to Rs.8,686 crore. While its gross bad loans almost doubled to Rs.1.06 lakh crore in a year, it sequentially rose marginally by about Rs.4,000 crore.

The gross NPA ratio was 7.14 per cent as on end September as compared to 6.94 per cent as on June end and 4.15 per cent a year ago. “The increase is not that large though the percentage may look so because of the lower growth of the denominator,” said Arundhati Bhattacharya, chairman, SBI at the post-earnings conference.

“We are not resolving as much as it is slipping. When resolution process starts we will see NPA stabilizing. Slippages have come from the stressed list,” she said.

Operating profit

SBI’s operating profit increased by 9.34 per cent to Rs.11,224 crore in the quarter mainly due to healthy growth of non-interest income which rose 36 per cent to Rs.8,424 crore. Net interest income growth was, however, flat at Rs.14,437 crore.

“We have seen very strong and sustained operating performance,” Ms Bhattacharya said adding that fee income growth was also healthy.

The bank’s fee income increased by 36.91 per cent to Rs. 4,317 crore in during the quarter. While the overall loan growth remained in single digit ( 8.1 per cent, y-o-y) but retail loans grew at a healthy pace of 20.42 per cent to Rs.3.5 lakh crore.

SBI’s capital adequacy ratio was at 13.94 per cent in Q2 and the bank expects Rs.7,575 crore capital infusion from the Centre in 2016-17.

[Source:- Hindu]