SBI net slips 38 per cent on higher provisioning

SBI Q2 profit slumps 38% YoY to Rs 1,582 crore as provisions more than double

State Bank of India (SBI), India's largest lender, has posted a 37.7 per cent decline in standalone net profit at Rs 1,581.55 crore in the September 2017 quarter as against Rs 2,538.32 crore in the same period of past year amid a rise in bad loans. In the corresponding quarter of the previous year, the bank had reported a net profit of Rs 2,538 crore.

Similarly, net NPAs rose to 8.84 per cent of net loans, from 8.59 per cent. However, on a sequential basis, gross NPAs and net NPAs improved a bit to 9.97 per cent and 5.97 per cent, respectively.

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 bank said that in order to boost its capital adequacy, the lender may raise around Rs 1,000 crore through QIP issue within the current fiscal.

SBI, which accounts for more than a fifth of India's banking assets, said gross bad loans as a percentage of total loans fell to 9.83 percent at the end of September from 9.97 percent three months earlier.

It's loan assets degrew marginally at Rs 1.52 lakh crore while Ananthasubramanian said signs are visible for better credit demand in the next two quarters.

The lenders Net Interest Income (NII) - the core income a bank earns by giving loans - increased 27.3 percent to Rs 18,585.90 crore versus Rs 14,600.16 crore a year ago.

Following the result, SBI shares gained as much as 7 percent to Rs 338 before closing at Rs 333.20, mostly because of the bank's improvement on asset quality in the September quarter. Net NPAs increased to Rs 97,896.29 crore as against Rs 60,013.45 crore. The annualised slippage ratio declined to 1.85 per cent compared to 5.28 per cent during the June quarter. In an analyst call, Kumar said, "I don't understand you analysts".

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