SBI Q3 net profit rises by 4% as core income falls on higher provisioning on bad assets
- INS Sindhuratna mishap: One more disaster under his watch, Navy Chief Admiral D K Joshi resigns
- Lok Sabha polls: For Paswan & son, Gujarat 2002 is history for 2014
- Jayanthi scuttled, Moily clears GM crop trials
- UPAâs farewell gift: a house for Lalu, rent waiver for many
- âNo one heard my side of story, I decided to go with familyâ
State Bank of India (SBI) today reported a moderate 4 per cent growth in profit -- the lowest in the past six quarters -- at Rs 3,396 crore in October-December quarter on fall in core income and higher provisioning due to rise in bad assets.
Total income of the bank rose to Rs 33,992 crore during the third quarter from Rs 29,787 crore in the same period a year ago.
Bad assets as gross NPA level touched 5.30 per cent in the quarter, compared to 4.61 per cent in the same period last fiscal, with fresh slippages of over Rs 8,100 crore.
SBI Chairman Pratip Chaudhuri attributed the rise in bad loans to slowing economic growth, high interest rates, difficulties faced by government in paying contractors and also some sector-specific issues like with iron and steel segment due to mining scams.
Chaudhuri reiterated that the worst is over for his bank on asset quality and added that up to Rs 2,000 crore of the NPA has already turned standard as of December.
"NPAs have peaked. What gives us comfort is that sectors like textiles, construction and roads are picking up."
SBI, which has exposure to many of the troubled firms, including state electricity boards, Kingfisher Airlines, Air India and Suzlon, saw its net NPA rise to 2.59 per cent of assets in the December quarter from 2.22 per cent a year ago.
Country's largest lender also saw a drop in fee income at Rs 2,559 crore in the quarter from Rs 2,642 crore a year ago.
Shares of SBI fell 3.5 per cent after the result, but later recovered to close down 1.80 per cent.
The SBI chief said mid-corporate segment continued to see some defaults, making the bank little hesitant and selective in lending to this sector.
Net interest income (NII), the core income for a bank, dipped 3.16 per cent to Rs 11,154 crore in the third quarter ended December 31 due to shifting of Rs 20,000 crore of pension corpus to a separate trust along with a rise in interest expended.
- Fancy numbers: RTO in PCMC earns Rs 8 crore
- Alarm in Ukraine as Putin orders surprise army drills on border
- Arrests made but two sensational murders still unsolved
- Infosys ex-CFO not to contest polls for AAP
- Monsoon, not Manmohan, led to agri growth: Yashwant
- Now, BJP workers to donate blood equal to Modi’s weight