SBI posts surprise loss in Q3, bad loans jump

Gladys Abbott
February 10, 2018

The company reported its net interest income, which is the difference between interest earned and interest expended, rose by 26.68 percent to Rs 18,687.52 crore, compared to Rs 14,751.54 crore a year ago.

The bank saw its non-interest income decline by 29.75 per cent, from Rs 11,507 crore to Rs 8,084 crore, as net interest income plunged due to mark-to-market losses from its treasury operations.

Provisions for bad loans rose about 93 percent to 31.55 billion rupees. Net NPAs fell slightly at 5.44 per cent as against 5.63 per cent year ago. Analysts on average had expected a profit of Rs 2,067 crore, Thomson Reuters Eikon data showed. He also said there may also be cases where there can be a write-back of already provided for accounts.

Total deposits of the bank stood at Rs 5.73 lakh crore as on December 31, 2017 against Rs 5.89 lakh crore at the end of December 2016.

The board of the bank on Friday made a decision to consider further preferential allotment of shares to the government amounting to Rs 5,132 crore.

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Kumar said the bank has signed an agreement with the government to raise Rs 20,000 crore in core equity from non-promoter investors, beyond the Rs 8,800 crore it expects through a preference issue to the government soon. The bank had earlier guided for 5-6% loan growth in the current fiscal.

The SBI's gross non-performing assets increased to 10.35% of gross advances as compared to 9.83% in the July-September 2017 quarter.

Though, the net interest margin, the difference between the yield on advances and cost of fund, improved sequentially to 2.72 percent.

When stated that the bank's performance is generally taken as a proxy for the state of the economy, Kumar said SBI's 90-day performance should not be equated with the broader economic activity.

SBI shares ended on a weak note by falling 1.68 per cent at Rs 296.40 on BSE Sensex.

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