Shock and woe as SBI reports first quarterly loss in 17 years

10 February, 2018, 06:48 | Author: Barbara Daniel
  • Bank of Baroda Q3 profit sinks 56% as provisions for bad loans nearly double

State Bank of India, the nation's biggest lender by assets, reported a surprise loss of 24.16 billion rupees ($375.10 million) for the three months ended December. Its net non-performing assets rose from 5.43% to 5.61%. "The slippage ratio for nine months was lower than a year ago and we aim to contain fresh slippages within two per cent in FY19", he said adding that the bank has provided almost 60 per cent towards cases under resolution via NCLT.

State Bank of India (SBI) unloaded two bits of bad news after market hours on Friday: An unexpected first quarterly net loss in at least 17 years and significant divergences in provisioning compared to the Reserve Bank of India's assessment.

Besides, SBI also reported a significant divergence - a staggering Rs 23,239 crore - compared to RBI's assessment as of March 2017.

A bulk Rs 10,000 crore of divergences were from the power sector and Kumar said further pain is in the offing, with high exposure to the sector.

The bank's bad loans or non-performing assets (NPAs) in Q3 stood at Rs 1.99 lakh crore from Rs 1.86 lakh crore in the previous quarter.

The bank, which has a Rs 78,000-crore exposure to the 40 accounts being resolved through the insolvency process, does not see much impact of such accounts on its bottomline as the provisions for these are already at 60 per cent levels. Contribution of treasury operations to the bank's income also came down during the quarter.

During the quarter, the central government has infused Rs 1,375 crore by way of preferential allotment of equity shares.

It said the growth in advances was fuelled on account of retail loan growth of 33.37 per cent and within retail loan, home loan grew by 44.33 per cent.

The overall capital adequacy ratio was at 12.68 per cent with the core tier-I at 10.30 per cent. "We are at the end of the NPA cycle and the scenario for next year looks very good".



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