SBI posts first profit in four quarters

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Net NPAs or bad loans stood at 4.84% of the net advances, down from 4.53%.

State Bank of India, the country’s largest lender, has reported a profit for the first time in four quarters for the July- September 2018 period. It had reported losses for three consecutive quarters leading up to this one.

The standalone net profit of ₹945 crore was however 40.26% lower compared to the same period last year, mainly due to mark-to-market provision of ₹1,749 crore. The bottomline was boosted by sale of merchant acquisition business and stake in SBI General Insurance.

“The net profit of ₹945 crore is modest but I can assure you that there is no looking back,”said Rajnish Kumar, chairman, SBI, during the post-earnings conference call.

Fresh slippages decline

“This number is going to get bigger and bigger here after,” he said.

His confidence in recording higher profit in the coming quarter is due to better asset quality on a sequential basis as fresh slippages fell to ₹10,888 crore from ₹14,349 crore.

“There is an all-round improvement on NPA (non-performing assets) front and I can say now we have complete control on this demon of NPA,” he announced.

Gross NPAs of the bank fell for two consecutive quarters to ₹2.05 lakh crore from ₹2.13 lakh crore in the first quarter of this fiscal and ₹2.23 lakh crore in the last quarter of the previous fiscal. The gross NPA ratio was at 9.95% at end September as compared with 10.69% in June and 9.83% in the year-earlier period.

Better asset quality helped the bank reduce provision for bad loans to ₹10,185 crore during the quarter from ₹13,038 crore in the previous quarter and ₹16,715 crore in the year-earlier period.

“We are happy to announce that we have returned to double-digit growth in the domestic front. The credit growth was 11.11% – in line with the guidance of 10-12% for FY19. NII and NIM both are showing signs of improvement,” he said. Net interest income grew by 12.5% on year to ₹20,906 crore during the quarter while non-interest income declined 41.5% to ₹9,375 crore due to provision for bond losses.

Non-interest income also included ₹1,087 crore on account of sale of merchant acquisition business and ₹473 crore from stake sale in SBI General Insurance. The domestic net interest margin improved to 2.88% in Q2 against 2.59% a year ago.

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