State Bank of India (SBI) on Friday reported a net profit of Rs 838.40 crore in fourth quarter of 2018-19 as against a net loss of Rs 7,718.17 crore during the corresponding January-March quarter of 2017-18, as the bank made higher provisions against non-performing assets (NPAs).
Income (standalone) during the March quarter of 2018-19 rose by nearly 11 per cent to Rs 75,670.50 crore as against Rs 68,436.06 crore in the same period of the preceding fiscal, the bank said. For the full year 2018-19, SBI reported a consolidated net profit of Rs 3,069.07 crore as against a loss of Rs 4,187.41 crore in the entire 2017-18 fiscal.
Income (consolidated) grew to Rs 3.30 lakh crore for the fiscal year compared to Rs 3.01 lakh crore in 2017-18.
The bank witnessed improvement in its asset quality as gross NPAs reduced to 7.53 per cent of gross advances at end March 2019, as against 10.91 per cent by end of March 2018. In absolute numbers, gross NPAs were down at Rs 172,750 crore as of March 2019 as against Rs 223,427 crore last year. SBI Chairman Rajnish Kumar said the balance sheet of the bank has been fully repaired and that the “shadow of the past” will not affect the bank’s financials. “I had earlier said this year would be the year of hope. I have lived up to the promise,” he said at a press conference.
Kumar said by March 2020, all of the past bad loan mess would be cleaned up and provided for. Net interest income, which grew by 14.92 per cent in Q4 FY19, was attributed mainly to growth in domestic credit, improved spreads and lower slippages. As a result, the domestic net interest margins increased to 3.02 per cent in the fourth quarter. The bank’s provisioning coverage ratio moved up to 79 per cent from 66 per cent a year ago.
Accounts such as Essar Steel, Alok Industries and Bhushan Steel have been provided fully and will get the bank decent recoveries, the bank said. “We have about Rs 16,000 crore recoveries in our pocket,” Kumar said. These accounts are at various stages of resolution under insolvency proceedings. SBI’s shares rose 2.94 per cent to Rs 308.05 on the BSE on Friday. SBI’s loan slippages came down to Rs 7,961 crore. The revenue of the bank’s retail banking business surged by 15.3 per cent. Provisions towards bad loans were at Rs 17,335 crore as of March 2019 as against Rs 24,080 crore a year ago.
SBI reduces MCLR by 5 bps
SBI has slashed its marginal cost-based lending rate (MCLR) by 5 bps across all tenors with 1 year MCLR coming down from 8.50 per cent to 8.45 per cent. As a result, rates on all loans linked to MCLR stand reduced by 5 bps with effect from May 10, 2019. This is the second rate cut by SBI in one month. After April Monetary Policy, the MCLR was reduced by 5 bps. With Friday’s MCLR cut, the reduction in home loan rates since April 10, 2019 till date is 15 bps.