SBI posts Rs 4,876-cr Q1 loss, as bad loans, provisions increase

SBI Chairman Rajnish Kumar said he expected additions of bad loans to be more controlled going forward, and loan recoveries to gather pace as default cases are resolved at the bankruptcy court.

By: ENS Economic Bureau | Mumbai | Published: August 11, 2018 2:39:43 am
SBI posts Rs 4,876-cr Q1 loss, as bad loans, provisions increase The bank’s gross non-performing assets (NPAs) rose to 10.69 per cent of total advances at the end of June, against 9.97 per cent a year ago.

Hit by higher non-performing assets (NPAs) and provisions, State Bank of India (SBI), India’s largest bank, has reported a loss of Rs 4,876 crore for the June quarter of fiscal 2018-19 against a net profit of Rs 2,006 crore in the same period of the previous fiscal.

SBI, which posted a loss of Rs 7,718 crore in the fourth quarter ended March 2018 has now booked losses for the third consecutive quarter in the wake of rising NPAs. SBI shares ended 3.79 per cent lower to settle at Rs 304.45 on the BSE. Intra-day, it plunged 4.85 per cent to Rs 301.10.

SBI Chairman Rajnish Kumar said he expected additions of bad loans to be more controlled going forward, and loan recoveries to gather pace as default cases are resolved at the bankruptcy court. When asked whether the bank would be able to report a net profit this year, he said, “If you ask me 100 per cent, then take it from December onwards.”

Kumar said the outcome of a case at the bankruptcy appellate tribunal will determine whether the current quarter will yield a profit, but was confident of posting a profit for the three months ending March 2019 and the full year ending March.

The bank’s gross non-performing assets (NPAs) rose to 10.69 per cent of total advances at the end of June, against 9.97 per cent a year ago. However, net NPA marginally declined to 5.29 per cent from 5.97 per cent earlier. In absolute numbers, gross NPAs increased to Rs 212,840 crore as of June 2018 from Rs 188,068 crore at the end of the same month last year. However, net NPAs of the bank declined to Rs 99,236 crore at the end of the first quarter, against Rs 107,560 crore in the year-ago period.

Its total income during the three-month period rose to Rs 65,492.67 crore as compared to Rs 62,911.08 crore in the June quarter of 2017-18. On a consolidated basis, the bank posted a net loss of Rs 4,230 crore as against a profit of Rs 3,032 crore earlier.

Total provisions during the quarter jumped by 115 percent year-on-year to Rs 19,228 crore from Rs 8,929.5 crore in June 2017. Sequentially, it fell 31.5 percent from Rs 28,096 crore in Q4 ended March 2018. The lender’s net interest income for the reporting quarter grew 23.8 per cent year on year to Rs 21,729 crore. Other income or non-interest income fell 16.5 per cent on year to Rs 6,679 crore, mainly on account of lower trading income. Excluding treasury income, the year-on-year growth was at 27.39 per cent.

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