Wednesday, January 26, 2022

SBI Q1 net plunges 32%, rise in bad loans slows

Fresh slippages of loans stood at Rs 8,790 cr, corporate slippages at Rs 3,681 cr.

By: ENS Economic Bureau | Mumbai |
August 13, 2016 2:41:42 am
7th pay commission, sbi loans, government employee loans, sbi loan for pensioners, pensioner loans, 7th pay commission benefits, business news, india news Total income on standalone basis increased to Rs 48,928.6 crore during the quarter against Rs 44,730.87 crore in the same period a year ago. (Source: File Photo)

State Bank of India (SBI), India’s largest bank, has reported a 32 per cent decline in net profit to Rs 2,520.9 crore for the quarter ended June 2016 as against Rs 3,692.4 crore in the year-ago period although the fresh rise in bad loans was smaller-than-expected.

With fresh slippages in bad loans declining, SBI shares shot up by 7.16 per cent to Rs 243.20 on the BSE on Friday. SBI’s fresh slippages of loans stood at Rs 8,790 crore for the quarter, including corporate slippages at Rs 3,681 crore. That was sharply lower compared to Rs 30,313 crore in preceding quarter. “Maximum amount of stress remains in iron & steel, power and infrastructure,” Arundhati Bhattacharya, Chairman, SBI said, adding the bank has retained watchlist number at Rs 31,000 crore.

Total income on standalone basis increased to Rs 48,928.6 crore during the quarter against Rs 44,730.87 crore in the same period a year ago. The bank. however, posted a massive 77.8 per cent fall in its net profit on a consolidated basis to Rs 1,046 crore for the June quarter due to nearly two-fold jump in provision for bad loans. The bank had a consolidated net profit of Rs 4,714 crore in the same quarter of last year. Provision for bad loans witnessed nearly a two-fold increase to Rs 6,340 crore, against Rs 3,358.58 crore in the year-ago period.

The bank’s gross non-performing assets (NPAs) rose to 6.49 per cent of total advances at the end of June, against 4.29 per cent a year ago. In value terms, SBI’s gross NPAs almost doubled to Rs 101,541 crore during the June quarter from Rs 56,420.77 crore in the year-ago period. Net NPAs of the bank also rose to Rs 57,420.98 crore (4.05 per cent) at the end of the first quarter, against Rs 28,669.14 crore (2.24 per cent) in the year-ago period.

“We are still looking at (bad loans) resolutions picking up pace. Resolutions have started but they have not picked up pace to that extent, and especially in respect of larger accounts, we really need to see much more improvement,” Bhattacharya said at a news conference, adding that she expected improvement in bad loan resolutions in the later part of the year.

“The quantum of rise in SBI’s NPAs, as evident from lower slippages, was slower than some of the peer PSU banks. That could be the reason for the rise in share prices. The NPA problem of the bank may be easing,” said an analyst. Net interest income (NII) rose 6.4 per cent on a year-on-year basis (YoY) to Rs 14,612 crore for the quarter ended June 30 as against Rs 13,732 crore in the year-ago period. Total provisions for the quarter were recorded at Rs 7,410 crore, compared with Rs 4,000 crore on a YoY basis.

Anand James, chief market strategist, Geojit BNP Paribas Financial Services, said, “SBI results were greeted positively and added muscle to banks’ out performance today (Friday).”

📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines

For all the latest Business News, download Indian Express App.

  • Newsguard
  • The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.
  • Newsguard
Advertisement
Advertisement
Advertisement
X