SBI Q2 standalone profit drops by 37.9% after rise in bad loans; net profit up at Rs 1840 crore

 PTI        Last Updated: November 10, 2017  | 17:34 IST
SBI Q2 standalone profit drops by 37.9% after rise in bad loans; net profit up at Rs 1840 crore

Country's largest public sector lender State Bank of India (SBI) on Friday posted manifold jump in consolidated net profit at Rs 1,840.43 crore for the second quarter ended on September 30, on the back of sale of its stake in SBI Life Insurance.

Its profit was just Rs 20.70 crore during the same quarter of the last financial year. On standalone basis, SBI's profit declined by 37.9 per cent to Rs 1,581.55 crore, from Rs 2,538.32 crore on account of rise in bad loans. Total income on standalone basis increased to Rs 65,429.63 crore in July-September 2017 against Rs 50,742.9 crore in the same period a year ago, State Bank India said in a filing to stock exchanges.

As of September 30, the bank's gross NPAs deteriorated to 9.83 per cent of gross advances, compared with 7.14 per cent year a year ago. Similarly, the net NPAs rose to 5.43 per cent from 4.19 per cent. Provisioning for non-performing assets (NPAs) or bad loans by the bank more than doubled to Rs 16,715.20 crore during the quarter under review, as against Rs 7,669.66 crore in the same period of last financial year.

In absolute terms, its gross NPAs rose to Rs 1,86,114.60 crore, from Rs 1,05,782.96 crore at the second quarter of the previous fiscal. Net NPAs increased to Rs 97,896.29 crore as against Rs 60,013.45 crore. Total income on consolidated basis rose to Rs 74,948.52 crore during the second quarter of the current fiscal, from Rs 72,918.4 crore in the same period of 2016-17.

SBI mopped up about Rs 8,400 crore by diluting its stake in SBI Life Insurance through initial public offer during the September quarter. SBI shares were trading at Rs 329.50, up 5.02 per cent on BSE.

While addressing press conference post earnings, SBI Chairman, Rajnish Kumar said gross slippages for the quarter stood at Rs 10,627 crore (including fresh slippages of Rs 9,026 crore). That was sharply lower compared with Rs 30,059 crore slippages reported in June quarter.

State Bank of India (SBI) had earlier reduced lending rate on home loan to 8.30%. With this reduction, SBI's offering in the home loan segment became the lowest in the market. On November 1, the bank lowered its one-year MCLR by 5 basis points to 7.95 per cent against 8 per cent earlier. Home loans lending rates are pegged over and above one-year MCLR rate. While for the salaried men the spread stands at 40 basis points, women borrowers have to pay 35 basis points over and above MCLR for home loan.

The bank had also reduced auto loan rates. The lending rate now stands reduced to 9.2 per cent from 9.25 per cent earlier after the cut in MCLR. The women loan borrowers can avail the same at 9.15 per cent due to a lower spread on MCLR applicable to them. 

Meanwhile, Bank of India's total profit rose to Rs 1.79 billion ($27.53 million) in the second quarter that ended on September 30 as compared to Rs 1.27 billion profit reported a year earlier. Bank of India is the country's sixth biggest lender by assets.

With the total profit of 41 per cent, the bank's bad loan ratio has also eased, say experts, who had expected the profit to be around Rs 666 million. The Mumbai-based bank said on Friday that it reported around 12.62 per cent bad loans out of the total loans this quarter, a slight decrease 13.45 per cent a year earlier. The bank had reported the total loans of 13.05 per cent a quarter earlier.

BOI had swung into black by registering a standalone net profit of Rs 87.71 crore for the first quarter that ended in June as bad loans were brought down year-on-year. The bank had reported a net loss of Rs 741.36 crore in the April-June quarter of previous fiscal due to bad assets and higher provisioning to cover it.

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