SBI logs 31.73% dip in net profit

Decline owing to higher provisioning

Hit by higher loan loss provisions, State Bank of India (SBI) reported a 31.73% decline in standalone net profit for the quarter ended June 30, 2016, at Rs 2,521 crore, compared with Rs 3,692 crore in the same quarter, previous fiscal.

Loan loss provisions for the bank during the quarter increased by Rs 2,981 crore, from Rs 3,359 crore, as on June 30, 2015, to Rs 6,340 crore, as on June 30, 2016.

Standalone net interest income for the bank during the quarter grew 4.23% to Rs 14,312 crore, compared with Rs 13,732 crore, in Q1FY16. As far as asset quality is concerned, gross non-performing assets (NPAs) went up by 44 basis points (bps) to 6.94%, during the quarter against 6.5% in Q4FY16, and by 265 bps from Q1FY16.

Net NPAs went up by 24 bps at 4.05% in Q1FY17, against 3.81% in Q4FY16, and by 181 bps from Q1 FY16. Asset quality, however, improved in the non-corporate book with gross NPA ratio in per segment loans declining from 1.17% in Q1FY16 to 0.86% in Q1FY17. Gross NPA ratio in agri loans declined from 9.36% in Q1FY16, to 7.03% in Q1FY17.

Non-interest income for the bank increased 44.16% to Rs 7,335 crore, from Rs 5,088 crores in Q1FY16, driven by increase in profit on sale of investments by 212.15%, increase of 22.3% in recovery in written off accounts, increase of 21.93% in forex income, and 6.08% in fee income.

Domestic net interest margins declined to 3.09% as on June 30, 2016, from 3.29% a year ago, whereas, foreign offices NIM improved to 1.37% as on June 30, 2016, from 1.3%, an year ago. Whole bank NIM declined to 2.83% as on June 30, 2016, from 2.99%, as on June 30, 2015.

As far as other key financial ratios for the bank are concerned, capital adequacy ratio under Basel III improved to 14.01% as on June 30, 2016, from 12% as on June 30, 2015. Revaluation of real estate assets boosted the bank’s CET-I capital by Rs 14,384 crore. Average cost of deposits declined to 5.98% during the quarter from 6.35% as on June 30, 2015, while average yield on advances moved from 10.33% as on June 30, 2015, to 9.55% as on June 30, 2016.

On a consolidated basis, the group reported a 77.81% decline in net profit for the quarter at Rs 1,046 crore, compared with Rs 4,714 crore in Q1FY16.

Gross NPA ratio for SBI Group increased from 4.46% as on June 30, 2015, to 6.4% as on March 31, 2016, and to 7.38% as on June 30, 2016, while net NPA ratio increased from 2.38% as on June 30, 2015, to 3.73% in March 2016, and to 4.35% as on June 30, 2016.