SBI Q1 profit falls 32% on higher provisions


Mumbai: The State Bank of India on Friday said its net profit for the June quarter fell 31.73% from a year ago due to higher provisions.

Net profit for the quarter was Rs.2,520.96 crore as compared to Rs.3,692.43 crore a year ago. According to a poll by 23 Bloomberg analysts, the bank was expected to post a net profit of Rs.2,503.10 crore.

Provisions and contingencies jumped 85.34% to Rs.7,413.10 crore as the bank had to set aside more money against bad loans.

Gross non-performing assets (NPAs) rose 3.43% to Rs.1.01 trillion at the end of June from Rs.98,172.80 crore three months ago. On year-on-year basis, gross NPAs jumped 80% from Rs.5,6420.77 crore. As a percentage of total loans, gross NPAs were at 6.94% at the end of the June quarter as compared to 6.5% in the previous quarter and 4.29% in the year-ago quarter.

Also Read: SBI Life Insurance Q1 net rises 6% to Rs215 crore

In December, the Reserve Bank of India (RBI) conducted an asset quality review across the banking sector, following which the banks were asked to recognize visibly stressed assets as NPAs. The RBI also asked banks to make adequate provisions for the stressed assets. This has hit the profitability of some banks. Net NPAs were at 4.05% in the June quarter compared to 3.81% in the previous quarter and 2.24% in the same quarter last year.

Net interest income (NII), or the core income a bank earns by giving loans, rose 4.23% to Rs.14,312.31 crore in the June quarter from Rs.13,732.03 crore last year. Other income increased 44.16% to Rs.7,335.08 crore from Rs.5,087.98 crore in the same period last year.

At 12.37pm, State Bank of India was trading at Rs.235.60 on the BSE, up 3.81% from its previous close, while India’s benchmark Sensex index rose 0.88% to 28,103.94 points.