SBI Q3 profit falls 62% on high provisions, slippages Rs 20692cr

Earnings missed analysts' expectations. Profit was expected at Rs 3,250 crore and net interest income at Rs 14,375 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18.

Asset quality weakened in December quarter but it was better compared to peers. Gross non-performing assets (NPA) increased 95 basis points QoQ and 20 bps YoY to 5.1 percent and net NPA rose 75 bps QoQ and 9 bps YoY to 2.89 percent in Q3.

In absolute terms, gross NPA jumped 28 percent sequentially and 17.4 percent on yearly basis to Rs 72,791.7 crore. Net NPA climbed 40.8 percent QoQ and 16.8 percent YoY to Rs 40,249 crore during the quarter, hit by fresh slippages.

SBI has reported fresh slippages of Rs 20,692 crore during the quarter, which was three-and-a-half times higher compared to Rs 5,875 crore in preceding quarter. A CNBC-TV18 poll had estimated slippages at Rs 15,000-20,000 crore for the quarter.

Provisions for bad loans shot up 82.3 percent sequentially and 49.2 percent year-on-year to Rs 7,949.4 crore in Q3 following asset quality review conducted by the Reserve Bank of India.

Other income during the quarter jumped 18 percent to Rs 6,177.5 crore and operating profit increased 2.2 percent to Rs 9,598 crore compared to same quarter last fiscal.

Capital adequacy ratio improved to 12.45 percent at the end of December 2015 compared to 12.17 percent in preceding quarter and 12.03 percent in year-ago period.

At 13:39 hours IST, the scrip of State Bank of India was quoting at Rs 156.60, down Rs 2.35, or 1.48 percent on the Bombay Stock Exchange.