SBI Q1 net profit rises 3.3% to Rs 3,349 crore

SBI Q1 net profit rises 3.3% to Rs 3,349 crore

SBI Q1 net profit rises 3.3% to Rs 3,349 crore

 Registering its first profit growth in six quarters, country’s largest bank SBI on Friday posted 3.3 per cent rise in net profit at Rs 3,349.08 crore in the three months to June, notwithstanding a steep 72 per cent hike in provisioning for bad loans.

The bank had posted a standalone net profit of Rs 3,241.08 crore in the year-ago period. On a consolidated basis, the bank's net profit increased 3.4 per cent to Rs 4,448.15 crore for the quarter ended June 30, against Rs 4,298.56 crore in the year-ago period.

Total income on a standalone basis increased to Rs 40,739.21 crore during the quarter, against Rs 36,192.62 crore in the year-ago period, the bank said in a BSE filing. Provision for bad loans increased to Rs 3,903.41 crore as against Rs 2,265.83 crore a year earlier, registering an increase of 72 per cent.

The bank's gross non-performing assets (NPAs) declined to 4.90 per cent of total advances at the end of June, against 5.56 per cent a year-ago. “Profitability pressures will continue if the economy doesn’t pick up. We need the economy to move up to ensure profitability pressure comes down,” SBI Chairperson Arundhati Bhattacharya said.

Bhushan Steel

A day after the arrest of Bhushan Steel vice chairman in the cash-for-loan case at Syndicate Bank, SBI - a big lender to the firm said it will press for an external agency to take over the day-to-day management of the company.

“The suggestion that I have made, which has been accepted by the banks that I have talked to, is that we will try to bring in an external management agency who will oversee the day to day running of the company,” Arundhati Bhattacharya said.

The bank has called for a meeting of the lenders’ consortium next week to discuss the proposal, she added.

The system has a whopping Rs 40,000-crore exposure to the Delhi-based Bhushan Steel through 51 lenders. There are two consortia, one on working capital loans led by SBI and the second on term-loans led by Punjab National Bank, representing the lenders' interests.

SBI bank has an exposure of Rs 6,000 crore to the steel-maker which is a standard asset at present.
The company is embroiled in a controversy following the arrest of Syndicate Bank CMD S K Jain last week for allegedly receiving a bribe of Rs 50 lakh to enhance the credit limits of the company. The CBI, which arrested Jain, also arrested Bhushan Steel's vice-chairman and MD Neeraj Singal.

Bhattacharya said the Bhushan Steel plant in Odisha is running well and the lenders do not want to expose their assets to any difficulties as a result of the imbroglio.