MUMBAI: State Bank of India (SBI) posted a 20.45 per cent decline in its standalone net profit for the June 2017 quarter at Rs 2,005.53 crore against the previous year’s Rs 2,520.96 crore. In its defence, the bank said the results are not comparable with the previous year considering the merger of six associate banks with itself during the quarter.
The country’s largest bank saw bad loans surge with gross NPAs shooting up to 9.97 per cent (in absolute numbers Rs 1.88 lakh crore) from 6.9 per cent in the previous quarter (Rs 1.01 lakh crore) and 6.94 per cent in the year-ago quarter. Alarmingly, slippages, the pace at which loans turn bad, stood at Rs 26,249 crore.
Net NPAs rose to 5.97 per cent against 3.71 per cent in the previous quarter and 4.05 per cent in the same quarter last year. Provisions and contingencies rose 53.1 per cent to Rs 21,054.74 crore. Within this, the bank set aside Rs 12,227 crore towards provisions, and after accounting for write-offs, it stood at Rs 8,929 crore.
SBI has put Rs 32,427 crore corporate advances in the ‘watch list’ and run the risk of turning bad. It also invoked strategic debt restructuring g for accounts worth Rs 12,807 crore, and the Scheme For Sustainable Structuring of Stressed Assets for another Rs 8,124 crore.
The saving grace, however, is the increase in net interest income, which grew 22 per cent to Rs 17,606.01 crore over last year, while other income was up 11.03 per cent at Rs 8,005.66 crore. Gross advances increased to Rs 18.86 lakh crore, up 1.46 per cent over the same quarter last year. SBI’s corporate and SME loan book was pared down by 4 per cent to Rs 9.7 lakh crore, while retail advances rose 13.3 per cent.
According to Arundhati Bhattacharya, chairperson of SBI, the entire branch process is expected to be completed by September. The total number of branches as of now stands at 23,423. She added that branch rationalisation would save Rs 1,160 crore per annum over a period of time. During the quarter, about 3,500 employees opted for voluntary retirement scheme and were paid a sum of Rs 473.4 crore.