MUMBAI: The State Bank of India (SBI) on Friday posted a net profit of Rs 838 core for the January-March quarter of financial year 2018-19, improving substantially from a Rs 7,718 crore loss in the corresponding period last year.
Operating profit for the fourth quarter of FY19 rose 6.61 per cent year-on-year to Rs 16,933 crore, and the bank used most of the profits to provide for bad loans in an effort to clean up its books, SBI chairman Rajnish Kumar told reporters.
He said there would be no legacy cost left by April 2020 as far as the corporate loan book is concerned. The bank is also cutting down on higher credit risk weighted assets. “Any asset that is guzzling capital, we are not going for that,” he said.
Gross Non-Performing Assets (GNPA) came down by 3.38 per cent to 7.53 per cent and the Net NPA ratio was down 2.72 per cent to 3.01 per cent, compared to the same quarter last year. The bank’s provision coverage ratio improved significantly to 78.73 per cent by the end of March 2019, from 66.17 per cent in the previous year.
“This shows that the balance sheet of the bank is fully repaired,” Kumar said. It had also recovered Rs 37,000 crore of loans, hard cash receivable in the last financial year, including Rs 13,036 crore recovered through the IBC process.
SBI’s net interest income grew 14.9 per cent YoY in the fourth quarter, and the credit growth was at 13.99 per cent. The bank is targeting a 10 to 12 per cent credit growth this fiscal.
“We have completely rewritten the loan policy,” Kumar said. The bank has added several new tools even to detect diversion, data analytics etc, to prevent fraud, he added.
It is also looking at divesting stake in two subsidiaries SBI Cards and SBI General in the current fiscal.
Separately, the bank reduced its lending rate by 5 basis points across all tenors, bringing down the MCLR to 8.45 per cent, a second marginal rate cut in a month. This has brought down home loan rates since April 10 by 15 basis points, the bank said.