It was a disappointing second quarter from the country's largest PSU bank. State Bank of India (SBI) missed expectations this quarter with net interest income rising only 5 percent to Rs 10,974 crore.
Profits, however, surged 30 percent to Rs 3,658 crore on the back of lowered provision for non-performing assets (NPAs).
Margins too were under pressure, lower at 3.45 percent sequentially. It's was sorry picture on the asset quality front too with gross NPAs up at 5.15 percent versus 4.99 percent last quarter.
In an interview to CNBC-TV18, Pratip Chaudhuri, chairman of SBI says, Q2 asset quality experience has been much better.
Below is the edited transcript of his interview on CNBC-TV18.
Q: Can you run us through your second quarter asset quality?
A: In Q1, we had a net increase of Rs 8,000 crore of NPA. In Q2, we had a much lower increase of Rs 2,000 crore. Even if you add the write offs of another Rs 2,000 crore, the net increase is only Rs 4,000 crore compared to Rs 8,000 crore in Q1. Therefore, Q2 asset quality experience has been much better.
Q: This quarter we have seen a good up-gradation and recovery, nearly Rs 4,500 crore and a write off of around Rs 1,900 crore. Is this something that we will see going forward?
A: May be. The write offs will depend on what kind of provisioning we have. But we still believe that many of our accounts have become delinquent because of temporary difficulties. Therefore, the run rate for up-gradation and recovery, we expect, to be continued at equally robust levels.