Moneycontrol Bureau
State Bank of India’s second quarter (July-September) net profit fell 35 percent year-on-year to Rs 2375 crore, a bigger fall than what the market was expecting. The average of a CNBC-TV18 poll had estimated net profit at Rs 2675 crore. Net interest income rose around 12 percent to Rs 12,252 crore, but so did non-performing assets (NPAs).
But the stock jumped over 3 percent immediately after the numbers were announced, with brokers saying the increase in bad loans was lower than what most analysts had anticipated.
Gross NPAs climbed to 5.64 percent from 5.56 percent in the June quarter, while net NPAs inched up to 2.91 percent from 2.83 percent.
Market was anticipating a major clean up of bad loans, similar to the exercise that former chairman Pratip Chaudhuri had carried out on taking charge in April 2011.
Broadly, the numbers reflect the continuing gloom in the economy, considering SBI’s leadership position in the banking sector.
Fresh slippages - the term to used to describe a restructured loan becoming an NPA - declined to Rs 8365 crore from Rs 13,766 crore quarter-on-quarter.
But recovery of bad loans too declined sharply at Rs 1414 crore, compared to Rs 4064 crore the previous year.
The bank had to write off Rs 1253 crore worth of loans during the quarter, and upgraded the category of Rs 2383 crore worth of loans.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
