SBI Q3 net profit plunges 67% to Rs 1,259 crore

Largest lender bites NPA bullet

The country’s largest lender State Bank of India (SBI) reported a massive 67 per cent fall in consolidated net profit at Rs 1,259.49 crore in the quarter to December, joining its peers in cleaning up the book, and classified loans worth Rs 20,692 crore as having turned bad.

SBI also warned of more pains in the March quarter to meet the RBI diktat to clean the books by the end of the fiscal year as the bank has only provided for about half of the accounts that are stressful.

The SBI Group had posted a profit-after-tax of Rs 3,828.20 crore in the third quarter of the last fiscal. On a standalone basis, the bank’s net profit dropped a massive 61.67 per cent to Rs 1,115 crore from Rs 2,910 crore due to increase in bad loans and the resultant higher provisioning.

However, in absolute terms the gross non-performing asset rose only 20 basis points to 5.10 per cent from 4.90 per cent, while net NPA rose just 9 basis points to 2.89 per cent.

But total provisions rose 31 per cent to Rs 8,483 crore from Rs 6,477 crore. Net loan loss provision was up 58.93 per cent to Rs 7,645 crore from Rs 4,810 crore.

“We have been saying that there are a few large accounts where workouts are happening and if they happened then things should be alright and if not, then we need to probably classify them as NPAs. In this quarter many of these have been classified as NPAs,” SBI Chairman Arundhati Bhattacharya told reporters here.