The State Bank of India's net profit dropped 34.56 per cent for the quarter ended September 30 to £ 253.80 million, as a provision for loan loss doubled to £767 million. The total provision of the country's largest lender increased 36 per cent to £868.6 million. While its gross bad loans almost doubled to £10.60 billion in a year, it sequentially rose marginally by about £400 million.
The gross NPA ratio was 7.14 per cent as on end September as compared to 6.94 per cent as on June end and 4.15 per cent a year ago. "The increase is not that large though the percentage may look so because of the lower growth of the denominator," said Arundhati Bhattacharya, chairman, SBI. "We are not resolving as much as it is slipping. When resolution process starts we will see NPA stabilising. Slippages have come from the stressed list," she said.
SBI's operating profit increasing by 9.34 per cent to £1.12 billion in the quarter mainly due to healthy growth of non-interest income which rose 36 per cent to £842.4 million. Net interest income growth was however, flat at £1.44 billion. "We have seen every strong and sustained operating performance," Bhattacharya said, adding that fee income growth was also healthy. The bank’s fee income increased by 36.91 per cent to £431.7 million during the quarter. While the overall loan growth remained in single digit ( 8.1 per cent, y-o-y) but retail loans grew at a healthy pace of 20.42 per cent to £35 billion. SBI’s capital adequacy ratio was at 13.94 per cent in Q2 and the bank expects £757.5 million capital infusion from the Centre in 2016-17.
