State Bank of India Q1 net profit drops 32%


On Friday State Bank of India (SBI), the nation's top lender by assets, accounted first-quarter net profit drops 32%, in line with estimates, and its bad loans increase a little. SBI shares climbs more than 5% following the results on the lower-than-expected increase in bad loans.

The lender, which accounts for more than a fifth of India's total bank loans and deposits, conveyed standalone net profit was 25.21 billion rupees for the three months to June 30, next to Rs 36.92 billion accounted a year former. According to data revealed by sources analysts on average had probable a net profit of Rs 25.4 billion.

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Gross bad loans as a percentage of total loans climbs to 6.94% as of end-June, from 6.50% in March. Net profit for the quarter was Rs.2,520.96 crore as compared to Rs.3,692.43 crore a year ago. According to sources, the bank was predictable to post a net profit of Rs.2,503.10 crore. Provisions and contingencies climbed 85.34% to Rs.7,413.10 crore as the bank had to set aside more money next to bad loans. Gross non-performing assets (NPAs) climbs 3.43% to Rs.1.01 trillion at the finish of June from Rs.98,172.80 crore three months ago.

On year-on-year basis, gross NPAs climbed 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 preceding quarter and 4.29% in the year-ago quarter. In December, the Reserve Bank of India (RBI) held an asset quality review across the banking sector, following which the banks were asked to distinguish visibly stressed assets as NPAs. The RBI also asked banks to make sufficient provisions for the stressed assets. This has hit the productivity of some banks.

Net NPAs were at 4.05% in the June quarter compared to 3.81% in the preceding quarter and 2.24% in the similar quarter previous 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 jumps0.88% to 28,103.94 points.

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