Country's largest lender State Bank of India reported a 20.4 percent degrowth in standalone profit at Rs 2,005.53 crore, dented by higher provisions. Asset quality including subsidiaries also worsened further.
Standalone net interest income grew by 22 percent to Rs 17,606.01 crore compared with corresponding quarter of previous fiscal.
The bank reported nearly three-fold jump in its consolidated profit at Rs 3,032 crore for the quarter ended June 2017 but net interest income declined 1.8 percent to Rs 19,323 crore YoY.
Standalone numbers include SBI and its associate banks (that merged from April 1, 2017) while consolidated numbers include banking as well as other businesses (insurance, other banking operations etc).
Net interest margin for the quarter declined sharply to 2.36 percent from 2.74 percent and domestic net interest margin fell to 2.5 percent from 2.93 percent on sequential basis.
Gross advances increased moderately by 1.46 percent year-on-year to Rs 18.86 lakh crore in June quarter, with retail loan growth of 13.31 percent, agri advances 1.69 percent, international growth 3.22 percent. Corporate & SME loan advances hurt overall loan growth, down by 4.35 percent.
Deposits growth was strong at 13.28 percent at 26.02 lakh crore, with CASA deposits showing a healthy 23.62 percent increase YoY.
"CASA ratio was healthy at 44.38 percent as on June 17, which increased from 40.67 percent as on June 16," the bank said.
Numbers missed analysts' expectations. Profit was estimated at Rs 2,485.3 crore and net interest income at Rs 18,767.2 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18.
Asset quality deteriorated further as gross non-performing assets increased 86 basis points to 9.97 percent and net NPA rose 78 basis points to 5.97 percent on sequential basis.
Gross NPA including associates banks rose 6.2 percent to Rs 1.88 lakh crore from Rs 1.77 lakh crore QoQ.
Bank's consolidated gross slippages for the quarter stood at Rs 30,059 crore and watchlist at Rs 24,444 crore (Rs 32,427 crore QoQ), Arundhati Bhattacharya, Chairwoman said while addressing press conference. Slippage from watchlist were at Rs 7,976 crore in Q1, she added.
Analysts have positive view on the stock and said investors should not worry about these numbers.
"Slippages are slighly on higher side, which may be included account from consumer electronics segment, that is why numbers are elevated. Gross non-perfoming assets are also slightly higher than our expectations," Manish Agarwalla, PhillipCapital.
Bhattacharya expects slippage ratio to decline from 5.38 percent in Q1FY18 to below 3.3 percent for FY18.
"Slippages for agri, SME & retail segments are expected to be at Rs 30,432 crore in FY18 against Rs 17,886 crore in Q1 and recovery for these segments is seen at Rs 16,790 crore in FY18 against Rs 2,988 crore in Q1," she said.
She expects credit cost below 2.25 percent for FY18 against 2.48 percent in Q1 and net interest margin to improve by 10-15 basis points from current levels.
Upgradation for the quarter stood at Rs 2,034 crore and recoveries at Rs 4,646 crore while write-offs were at Rs 13,176 crore.
Standalone provisions for non-performing assets in Q1 stood at Rs 12,125.3 crore, higher by 10.3 percent on sequential basis and 91.3 percent on year-on-year basis.
Standalone other income (non-interest income) during the quarter increased 11 percent to Rs 8,006 crore while operating profit rose 7.4 percent to Rs 11,874 crore compared to same quarter last year.At 13:25 hours IST, the stock price was quoting at Rs 284.65, down Rs 11.90, or 4.01 percent amid high volumes on the BSE.