This is the first quarterly result from SBI after merging with five of its associate banks with it from April 1, 2017.
Mumbai: India’s largest lender State Bank of India (SBI) on Friday reported a 20 per cent fall in standalone net profits for the quarter ended June 2017 amidst an increase in provision for bad loans. This is the first quarterly result from SBI after merging with five of its associate banks with it from April 1, 2017. The bank posted a standalone net profit of Rs 2,006 crore during the April-June period as compared to Rs 2,521 crore reported during the same period last year.
On the other hand, its consolidated net profit, which includes income from both banking as well as non-banking operations surged 436 per cent. However, the bank saw further deterioration in its asset quality for the quarter with the non gross performing assets soaring 86 basis points to 9.97 per cent from 7.40 per cent a year ago and net non performing assets increasing to 5.97 per cent from 4.36 per cent.
The provisions set aside for bad loans stood at Rs 12,125.26 crore, up 10.30 per cent on a sequential basis and 91 per cent higher when compared to the same period last year. Looking ahead, SBI expects the pace of fresh slippages to come down in the current fiscal. Arundhati Bhattacharya, chairwoman, SBI said the slippage ratio is expected to drop to below 3.3 per cent in FY18 from 5.3 per cent in Q1FY18.
“Slippages for agri, small and medium enterprises (SME) and retail segments are expected to be at Rs 30,432 crore in FY18 against Rs 17,886 crore in Q1 and recovery for these segments is seen at Rs 16,790 crore in FY18 against Rs 2,988 crore in Q1,” she added.
The lower than expected quarterly number saw heavy selling in the stock of SBI. The shares of SBI fell 5.36 per cent to end the day at Rs 280.65 on the BSE.