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The State Bank of India reported a 66.23% decline in net profit at Rs 1,264 crore for the fourth quarter ended March 31, 2016. It had posted net profit of Rs 3,742 crore an year ago.
The decline in profits was mainly on account of higher provisioning as per RBI’s asset quality review (AQR). The bank has recognised the provisioning impact in line with RBI’s AQR as well as in respect of other weak accounts to proactively address possible future requirements, SBI said.
Provisions for the bank during the quarter stood at Rs 12,928 crore, compared to Rs 8,483 crore in the third quarter of the current fiscal (Q3FY16), and Rs 9,018 crore in the same quarter previous fiscal (Q4FY15).
Asset quality for SBI witnessed a decline as well with gross non performing assets at 6.5%, compared to 5.1% in Q3FY16, and 4.25% in Q4FY15. Net NPAs for the bank stood at 3.81%, as against 2.89% in the sequential quarter, and 2.12% in the same quarter of the previous fiscal.
Net interest income for the bank increased 3.94% to Rs 15,291 crore in the reported quarter from Rs 14,712 crore in Q4FY15.
Bad loans under control
“The bank reportedly has a watch list at only 1% of outstanding loan and this number brought relief to the markets that potential bad loans are under control. While the stock has rallied sharply on Friday, we see potential for further re-rating as investors factor in a far better than peer performance,” Motilal Oswal Securities Vice President (Research) Ravi Shenoy said.
Operating expenses for the bank increased by 12.68% to Rs 11,794 crore in Q4FY16, from Rs 10,467 crore in Q4FY15. Taking into account write back of Rs 416 crore in depreciation due to change in methodology in Q4FY15, increase in operating expenses would have been lower at 8.37%, the bank said.
Domestic NIMs for the bank declined to 3.27% in March 2016 from 3.54% in March #2015, whereas foreign offices NIM improved to 1.29% in March 2016 from 1.18% in March 2015. Whole bank NIM declined to 2.96% in March 16 from 3.16% in March 15.
The decline in profits was mainly on account of higher provisioning as per RBI’s asset quality review (AQR). The bank has recognised the provisioning impact in line with RBI’s AQR as well as in respect of other weak accounts to proactively address possible future requirements, SBI said.
Provisions for the bank during the quarter stood at Rs 12,928 crore, compared to Rs 8,483 crore in the third quarter of the current fiscal (Q3FY16), and Rs 9,018 crore in the same quarter previous fiscal (Q4FY15).
Asset quality for SBI witnessed a decline as well with gross non performing assets at 6.5%, compared to 5.1% in Q3FY16, and 4.25% in Q4FY15. Net NPAs for the bank stood at 3.81%, as against 2.89% in the sequential quarter, and 2.12% in the same quarter of the previous fiscal.
Net interest income for the bank increased 3.94% to Rs 15,291 crore in the reported quarter from Rs 14,712 crore in Q4FY15.
Bad loans under control
“The bank reportedly has a watch list at only 1% of outstanding loan and this number brought relief to the markets that potential bad loans are under control. While the stock has rallied sharply on Friday, we see potential for further re-rating as investors factor in a far better than peer performance,” Motilal Oswal Securities Vice President (Research) Ravi Shenoy said.
Operating expenses for the bank increased by 12.68% to Rs 11,794 crore in Q4FY16, from Rs 10,467 crore in Q4FY15. Taking into account write back of Rs 416 crore in depreciation due to change in methodology in Q4FY15, increase in operating expenses would have been lower at 8.37%, the bank said.
Domestic NIMs for the bank declined to 3.27% in March 2016 from 3.54% in March #2015, whereas foreign offices NIM improved to 1.29% in March 2016 from 1.18% in March 2015. Whole bank NIM declined to 2.96% in March 16 from 3.16% in March 15.
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(Published 27 May 2016, 19:59 IST)
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