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Big flop show: SBI Q3 net loss at Rs 1887 crore

10 February 2018, 01:50 | Austin Hogan

The State Bank of India branch in Korattur Chennai

SBI net loss at Rs 2416 crore in Q3FY18 reports divergence of Rs 23,239 crore

Provisions other than tax and contingencies during the quarter was Rs 1,385.38 crore, compared with Rs 1,326.05 crore in the comparative quarter previous year.

SBI's net interest income - the difference between interest earned and interest expended - grew by 5.17% to Rs 18,687.52 crore during the October-December 2017 quarter.

Thus, the bad loan provisions for the quarter rose 92.61 per cent to Rs 3,155 crore as against Rs 1,638 crore in the year-ago period.

Return on assets, which was already in the negative, further deteriorated to 1.75 per from 0.77 per cent a year ago. Higher provisions for stressed assets ate into the bank's bottomline even as interest income of the bank remained low. Analysts on average had expected a profit of Rs 2,067 crore, Thomson Reuters Eikon data showed. Over Rs 6,000 crore in provisions was due to the divergences.

The third-biggest state-run lender Bank of Baroda said net profit more than halved on higher provisions, while three smaller state-run banks - Central Bank of India, UCO Bank and Syndicate Bank - posted losses.

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The board of the bank on Friday chose to consider further preferential allotment of shares to the government amounting to Rs 5,132 crore.

Kumar made it clear that the new infusion is not for covering loan losses through provisions, but would serve as growth capital. The gross non-performing assets ratio jumped from 7.23 per cent to cross the double digits mark at 10.35 per cent during the quarter under review.

"Domestic credit registered YoY growth of 16.38 percent driven by retail loans growth of 33.37 percent", the bank said, adding net interest margin for global and domestic operations improved by 41 bps & 56 bps, respectively.

When pointed out that SBI's performance is generally taken as a proxy for the state of the economy, Kumar said SBI's 90-day performance should not be equated with the broader economic activity.

Stock of the bank closed 1.68 per cent down at Rs 296.40 apiece on BSE today.



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