Bad loans take a toll on SBI, Q4 profit dips 66%

Kolkata, May 27

The country’s biggest lender, State Bank of India, today posted a massive 66% fall in its net profit in the March quarter, weighed down by higher provisions for bad loans, which jumped to a staggering Rs 1 lakh crore.

SBI’s bad loans are nearly four times that of its private sector counterpart ICICI Bank, which had reported non-performing loans worth Rs 26,000 crore at the end of the March quarter.

The bank’s provision towards bad loans alone was raised to Rs 12,139.17 crore during the last quarter of 2015-16, up from Rs 4,985.83 crore in the year-ago period.

Showing a high level of stress in its loan book, the bank said slippages during the quarter stood at about Rs 30,000 crore, while Chairman Arundhati Bhattacharya said accounts worth Rs 31,000 crore were put on ‘special watch list’.

Net profit in the fourth quarter of the previous fiscal, 2014-15, was Rs 3,742 crore.

Its total income on standalone basis increased to Rs 53,526.97 crore in the quarter under review, from Rs 48,616.41 crore a year ago.

Bhattacharya said the decline in net profit was due to the impact of asset quality review (AQR) to the extent of Rs 9,000 crore during the period.

“Slippages during the last quarter of last fiscal were to the tune of Rs 30,000 crore, out of which Rs 1,000 crore was due to SME and agriculture, while Rs 29,000 crore was on account of large and mid corporates,” Bhattacharya said at a news conference here today.

“SBI has currently recognised much of the stressed accounts. Accounts worth Rs 31,000 crore had been put on special watch list,” she added.

In the last quarter of 2015-16, the bank had used a counter-cyclical provision of Rs 1,100 crore. Another amount of Rs 1,100 crore counter-cyclical provision was still left to be used, she said. — Agencies