State Bank of India chairman Arundhati Bhattacharya on Tuesday said SBI’s non-performing assets are expected to rise in the coming quarter and affect its profits. Shares of SBI plunged nearly 7 per cent on Tuesday.
“We had already said ..I will say the same thing, that our profits were impacted due to rise in non-performing assets (NPAs),” she said on the sidelines of the opening of the bank’s dedicated Japan desk.
“In the next quarter too, NPAs will rise further that will affect our profits,” she said.
SBI’s gross NPAs rose to Rs 72,791.73 crore at the end of the December quarter as against Rs 61,991.45 crore a year earlier. Higher provisioning for NPAs led to SBI’s consolidated net profit falling sharply by 67 per cent to Rs 1,259.49 crore for October-December quarter.
In the last three years, public sector banks have written off Rs 1,14,000 crore as reported by The Indian Express on February 8. After writing off Rs 53,100 crore in the 2014-15, banks are expected to write off another Rs 52,227 crore this year, as per data from India Ratings.
Another SBI official said the bank aims to recover 10-15 per cent of the written-off loans annually.
Speaking about SBI’s Japan desk, Bhattacharya said this will facilitate Japanese investors who are keen to put money in India.
“We will inform them about their regulatory requirements, their tax requirement etc. Our Japan desk will try and provide the kind of information which Japanese investors and entrepreneurs should know in order to come to this country,” she said.