Moneycontrol Bureau
India's largest lender State Bank of India's (SBI) fourth quarter standalone profit fell sharply by 66 percent to Rs 1,263.8 crore, impacted by more than 2-fold increase in provisions and slow growth in net interest income. Profitability was supported by other income, operating profit and tax write-back.
Net interest income, the difference between interest earned and interest expended, grew by 3.9 percent to Rs 15,290.76 crore from Rs 14,711.76 crore YoY.
Gross advances increased 13.04 percent to Rs 15.09 lakh crore and deposits growth was 9.76 percent at Rs 17.3 lakh crore as of March 2016.
SBI said other income or non-interest income surged 25.6 percent to Rs 10,695.62 crore compared to year-ago period, which included forex gain of Rs 2,034 crore, driven by increase of 18.22 percent in fee income and 44.47 percent in recovery in written off accounts.
Operating profit increased 11.2 percent year-on-year to Rs 14,192 crore in Q4.
Profit was lower than estimates while net interest income beat expectations. According to CNBC-TV18's consensus estimates, profit was estimated at Rs 1,916 crore and NII at Rs 13,915.1 crore for the quarter.
Provisions for non-performing assets shot up significantly by 58.8 percent quarter-on-quarter and 143.5 percent year-on-year to Rs 12,139.2 crore in quarter ended March 2016.
Provision coverage ratio stood at 60.69 percent as on March 2016, which declined compared to 65.23 percent as of December 2015.
Asset quality in Q4, like other PSU banks, also worsened due to higher-than-expected slippages of Rs 30,313 crore (against Rs 20,692 crore QoQ and forecast of Rs 20,000-25,000 crore).
Gross non-performing assets (as a percentage of gross advances) increased 140 basis points sequentially to 6.5 percent and net NPAs (as a percentage of net advances) climbed 92 bps to 3.81 percent in Q4.
In absolute terms, gross advances jumped sharply by 35 percent to Rs 98,172.8 crore and net advances saw a whopping 39 percent spike at Rs 55,807 crore compared to December quarter.
The bank has implemented RBI directions with respect to asset quality review, wherein the Reserve Bank advised to reclassify/make additional provision in case of certain advance accounts over two quarters ending December 2015 and March 2016, SBI said in its filing.
SBI has tax write-back of Rs 246 crore during the quarter against tax expenses of Rs 2,074.43 crore in corresponding period of last fiscal.
At 13:16 hours IST, the scrip of State Bank of India was quoting at Rs 185.30, up Rs 1.55, or 0.84 percent on BSE.
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