SBI Q1 net profit up 137% to Rs 3,752 cr

Rising NPAs a cause for concern

SBI Q1 net profit up  137% to Rs 3,752 cr
The country’s premier lender, State Bank of India (SBI), on Friday, reported a 137 per cent jump in net profit at Rs 3,752 crore for the first quarter ended June 30, 2012, as compared with a net profit of Rs 1,583 crore in the same quarter last fiscal.

Total income of the bank grew from Rs 27,732 crore in Q1 (first quarter) fiscal 2012 to Rs 32,415 crore in Q1 fiscal 13 showing a growth of 16.89 per cent.

 Its non-performing loans rose to nearly 5 per cent at June-end from 3.5 per cent a year earlier, but provisions, or the funds set aside for bad loans and contingencies, were down 41 per cent to Rs 2,560 crore. The net NPAs went up from 0.50 per cent to 1.03 per cent during the current quarter.

SBI’s non-performing assets (NPA) continue to be a cause of concern as reflected by its shares which are under pressure and closed this day at Rs 1,888, down 4.26 per cent over the previous closing. Experts aver that SBI’s exposure to embattled Kingfisher Airlines and Air India is also causing some nervousness to investors.

However, SBI Chairman Pratip Chaudhuri tried to give a positive spin to the Q1 performance saying that the numbers should be compared on a year-on-year basis and not quarter-on-quarter basis, as the first quarter is usually weak in terms of credit offtake. He pointed out that the net profit figure of Rs 3,752 crore is the highest ever for the first quarter, and in absolute terms, next only to Reliance Industries.

Net interest income, the difference between interest earned and interest expended, increased to Rs 11,119 crore in Q1 fiscal 2013, which is a rise of 14.63 per cent over Rs 9,699 crore in Q1 fiscal 2012. Capital adequacy ratio (CAR) of the Bank increased from 11.60 to 13.17 per cent, showing YoY growth of 157 basis points.

During the quarter under review, SBI restructured loans worth Rs 562 crore and its cumulative restructured loan book stands at Rs 37,000 crore.

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