Moneycontrol Bureau
State Bank of India (SBI), the country's biggest lender by asset size, said profit in Q1 fell 31.7 percent year-on-year to Rs 2,520.96 crore. Overall earnings met analysts' expectations and the major positive was that the bank managed to lower its slippages significantly on sequential basis that drove the stock higher by 9 percent intraday.
Profit was supported by other income & operating profit and lower tax cost but remained impacted by higher provisions.
Net interest income, the difference between interest earned and interest expended, grew by 4.2 percent to Rs 14,312.31 crore on yearly basis.SBI said advances (loans) during the quarter grew by 10.7 percent to Rs 14.16 lakh crore while deposits jumped 10.5 percent to Rs 17.82 lakh crore Q1 YoY.
Profit was estimated at Rs 2,504.9 crore and net interest income at Rs 14,489.5 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18.
Provisions and contingencies dropped sharply by 43.7 percent quarter-on-quarter to Rs 7,413.1 crore in the quarter ended June 2016, though increased 85.3 percent compared with year-ago period. It included Rs 6,339 crore of provisions for non-performing assets.
Provision coverage ratio stood at 61.57 percent in June 2016, which improved compared to 60.69 percent in March 2016.
Asset quality looked more or less stable, though it weakened a bit. Gross non-performing assets (NPA) as a percentage of gross advances increased 44 basis points to 6.94 percent and net NPA 24 basis points to 4.05 percent on sequential basis.On absolute basis, gross NPAs during the quarter rose 3.4 percent to Rs 1,01,541 crore and net NPA climbed 2.9 percent to Rs 57,420 crore QoQ.
SBI said fresh slippages stood at Rs 8,790 crore for the quarter, including corporate slippages at Rs 3,681 crore. That was sharply lower compared to Rs 30,313 crore in preceding quarter."Maximum amount of stress remains in iron & steel, power & infra," Arundhati Bhattacharya, chairman said, adding the bank has retained watchlist number at Rs 31,000 crore.Non-interest income (other income) in Q1 shot up 44.2 percent Rs 7,335 crore and operating profit increased 20.1 percent to Rs 11,053.9 crore compared with year-ago period. Tax expenses declined 26 percent to Rs 1,120 crore in same period.
Capital adequacy ratio improved to 14.01 percent in the quarter ended June 2016 compared with 13.12 percent in preceding period and 12 percent in corresponding quarter of last fiscal.Credit cost ratio improved to 1.68 percent in June quarter against 3.64 percent in March quarter.
At 13:01 hours IST, the scrip of State Bank of India was quoting at Rs 245.00, up Rs 18.05, or 7.95 percent amid high volumes on the BSE.
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