On sequential basis, SBI's Q1 loss narrowed from Rs 7,718.2 crore due to sharp drop in provisions.
State Bank of India, the country's largest lender, started off the financial year 2018-19 on a mixed note as it posted big loss for the quarter and improved asset quality.
The stock price turned volatile after results announcement as it fell 3 percent followed by rebound of 2 percent and then it corrected again by nearly 4 percent.
It closed at Rs 304.45, down Rs 12.00, or 3.79 percent on the BSE.
Here are 10 key takeaways from April-June quarter earnings:
The bank reported loss for the quarter at Rs 4,876 crore against profit of Rs Rs 2,005.5 crore in same period last year, dented by treasury loss that impacted its other income and higher provisions. Higher tax credit limited quarterly loss.
But on sequential basis, loss narrowed from Rs 7,718.2 crore due to sharp drop in provisions.
"Net loss is largely attributable to lower trading income and significant MTM losses due to hardening of bond yields, and higher provision on account of wage revision and enhancement in gratuity ceiling," the bank said.
Net interest Income
Net interest income, the difference between interest earned and interest expended, grew by 23.8 percent year-on-year to Rs 21,798 crore in Q1.
Domestic net interest margin expanded by 45 bps YoY and 28 bps sequentially to 2.95 percent in June quarter, the bank said.
Advances and Deposits
The bank registered a growth of 5.49 percent YoY in its loan book to Rs 19,90,172 crore in June quarter with domestic advances growing 7.21 percent to Rs 17,23,443 crore while international advances declined by 4.43 percent YoY to Rs 2,66,728 crore.
"Retail Advances increased by 14.11 percent YoY to Rs 5,59,134 crore as on June 18 with home loans growing by 13.01 percent, and auto loans and express credit increased by 12.42 percent and 30.93 percent respectively during the same period," SBI said.
Deposits of the bank increased by 5.58 percent year-on-year to Rs 27,47,813 crore as on June 18. "Domestic CASA deposits rose by Rs 82,740 crore or 7.43 percent YoY to Rs 11,96,195 crore in June quarter."
CASA ratio improved by 69 bps from 44.38 percent in June 2017 to 45.07 percent in June 2018, whereas daily average CASA improved by 103 bps to 44.84 percent YoY.
Provisions and contingencies increased 115 percent year-on-year to Rs 19,228 crore during the quarter ended June, but fell 31.6 percent sequentially.
Provisions for non-performing assets increased 7.5 percent YoY to Rs 13,037.90 crore but declined 46 percent sequentially.
"Provision coverage ratio improved by 846 bps YoY and 308 bps sequentially to 69.25 percent as on June 18.
Asset quality improved during the quarter sequentially. Gross non-performing assets as a percentage of gross advances were lower at 10.69 percent against 10.91 percent in the previous quarter while net NPAs were down at 5.29 percent compared to 5.73 percent in March quarter.
In absolute terms, gross NPAs declined 4.7 percent sequentially to Rs 2,12,840 crore and net NPAs dropped 10.5 percent to Rs 99,236.3 crore in June quarter.
Slippages and Watchlist
Gross slippages were sharply lower for the quarter at Rs 14,349 crore against Rs 32,821 crore in quarter ended March 2018, registering a 56 percent fall sequentially.
Fresh slippages for the quarter stood at Rs 9,985 crore (against Rs 33,670 crore YoY) and interest in outstanding at Rs 4,365 crore (against decline of Rs 849 crore YoY).
Slippages ratio improved during the quarter to 1.95 percent against 6.9 percent in March quarter and credit cost ratio also improved to 2.55 percent against 4.93 percent QoQ.
The bank said watchlist for June quarter stood at Rs 24,633 crore, which declined from Rs 28,989 crore as of March 2018 due to SMA 1 & 2 outside watchlist, power, roads & EPC, textiles and others.
SBI further said two accounts resolved from NCLT 1 list, with recovery of 73.5 percent and 53.7 percent respectively. "We expected haircut on entire NCLT List 1 is 52 percent and surplus will be utilised for other resolutions. Resolution of NCLT accounts will lead to lower GNPAs, in addition to better margins."
Recoveries & upgrades for the quarter stood at Rs 14,856 crore against Rs 85 crore in March quarter.
The bank expects recoveries of almost Rs 4,000 crore from one account in NCLT List 1. "We have provided for anything that can hit bank in the coming quarters. We recognised entire net mark-to-market on investments of Rs 5,893 crore," SBI Chairman, Rajnish Kumar said while addressing press conference.
Recovery in Written-Off Accounts
Recovery in written-off accounts registered a robust growth of 240.74 percent from Rs 712 crore in Q1FY18 to Rs 2,426 crore in Q1FY19 with major contribution coming from one large resolution, the bank said.
Even after excluding the impact of such resolution, the YoY growth in recovery in written off accounts is 49.72 percent.
Other income or non-interest income slipped 16.6 percent year-on-year to Rs 6,679.5 crore in Q1 mainly on account of lower trading income.
"Excluding treasury income, YoY growth in non-interest income was 27.39 percent," the bank said.
Fee Income increased from Rs 4,870 crore in Q1FY18 to Rs 4,976 crore in Q1FY19, a YoY growth of 2.19 percent with significant contribution from Commission on government business, LC/BG and cross sell income which registered a growth of 19.20 percent, 45.34 percent and 30.45 percent respectively during the period.
Operating profit increased 0.8 percent year-on-year to Rs 11,973 crore in Q1 while operating expenses jumped 20.14 percent to Rs 16,504.72 crore.
Employee cost during the quarter surged 25.7 percent year-on-year to Rs 9,708.4 crore and other operating cost increased 13 percent to Rs 6,796.3 crore.
Tax Credit/ExpensesSBI reported tax credit for the quarter at Rs 2,379.3 crore against tax expenses of Rs 939 crore in year-ago.