Moneycontrol Bureau
India's banking behemoth the -
State Bank of India (SBI) on Thursday reported nearly 19 percent year-on-year drop in its fourth quarter (January - March, FY13) net profit at Rs 3,300 crore. Higher provisions against non-performing assets (NPAs) and marginal growth in other income dented the bank's profit margin.
"This quarter was characterised by high level of lending activities," SBI chairman told media persons in Kolkata.
"In the current context, the pressure on asset quality continues. The decline in terms of more assets falling into sub-standard category perhaps got arrested. The provision requirment in terms of sub-standard and doubtful categories increased substantially," he said.
SBI shares on Thursday slipped 8 percent to close the day's trading at Rs 2,178 on NSE. The quarterly performance fell short of meeting market expectations. Analysts on an average had expected 12 percent y-o-y fall in its net profit at Rs 3,568 crore and just a 2 percent dip in its net interest income.
Also read: How to play SBI after Q4 results miss estimateThe bank declared a dividend of Rs 41.50 per share as compared with Rs 35/share in the previous year.
Net interest income or the difference between interest earned and paid out, slipped more than 5 percent y-o-y o Rs 11,080 crore. Provisions against NPAs shot up 40 percent y-o-y to about Rs 4,000 crore. Total provisions increased 33 percent to Rs 4,180 crore during the same period. Other income inched up 3 percent to Rs 5,547 crore.
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SBI result a mixed bag; fall in NIM a worry: IIFLGross NPA ratio rose to 4.75 percent as compared with 4.44 percent a year back. Net NPA ratio stood at 2.10 percent as against 1.82 percent during the same time.
SBI restructured Rs 8,669 crore loans during the January - March period on incremental basis. This was a little higher than the market expectation of Rs 8,000 crore.
However, the bank's standalone net profit rose 20 percent y-o-y to Rs 14,105 crore for the year ended March 31, 2013. Consolidated net profit increased 16 percent y-o-y to Rs 18,323 crore.
The bank expanded its loans by 21 percent to Rs 10.46 lakh crore on standalone basis, surpassing the industry credit growth at around 14 percent in 2012-13. Its consolidated credit (including its group banks) increased 20 percent y-o-y to Rs 13.93 lakh crore.
"Domestic net interest margin stood at 3.66 percent in FY13 as against 4.17 percent a year back. The margin contraction is due to accounting for the pension funds. Previous year, the pension money was treated as interest free and the money was deployed in lending operation of the bank. This led to higher NIM. This year, we have moved the money to pension funds," Chaudhuri said.
Deposits grew a little more than 15 percent y-o-y basis to Rs 12.03 lakh crore. Consolidated deposit book too rose at a similar pace to Rs 16.27 lakh crore.
During the year SBI provided around Rs 945 crore cumulatively on account of wage revision.
"SBI Q4 performance was not really dissapointing," Vaibhav Agarwal, vice president research, Angel Broking told moneycontrol.com.
"The bank has made adequate provisions on all counts. Loan provisions shot up due to one big account. It is good for its long term health. The bank recovered good amount of loans. However, the stock market reaction is more to do with the broader index, which dropped sharply on Thursday," he said.
SBI had a credit exposure of around Rs 3,500 crore in Pune-based Suzlon Energy, which was referred by its lenders for restructuring. During the quarter, the bank provided fully on account of this.
Upgrades and recoveries together stood Rs 5718 crore as against Rs 2,797 crore in the October - December quarter.
saikat.das@network18online.com 
