SBI standalone profit falls 37.7%

SBI standalone profit falls 37.7%

Newly appointed chairman Rajnish Kumar in his earnings call said that the bank is poised to emerge stronger in the quarters ahead as the biggest shareholder, the government agreed to invest funds to shore up its capital, helping it accelerate lending.

The company reported a standalone revenue of Rs 1,268 cr in September 2017 as against a revenue of Rs 1,307 cr in September 2016 quarter resulting in a decline by 3%.

As per directions for initiating Insolvency Process- Provisioning Norms, in respect of nine borrowal accounts covered under provisions of IBC, the bank was required to make additional provision of Rs 278.82 crore to be proportionately spread over three quarters starting from the second quarter, i.e. September 2017 in order to make required provision by March 2018, the bank said in a regulatory filing.

The Kolkata-headquartered bank had registered a net profit of Rs 65.03 crore in the July-September quarter of the previous financial year. "The rate at which the slippage ratio has started coming down, we are hopefully in for some good times", Kumar said.

"Yes, this quarter we had some cushion available from the stake sale of SBI Life", he said. Nifty PSU Bank as top gainer increased 4.32 per cent to settle for the week at 4,001.45 (+65.70) points. "Further, the new management chose to strengthen the balance sheet over profitability by increasing provision coverage ratio".

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"We have made more than 50 percent provision for both of RBI's NCLT list".

The bank, which booked a profit of ₹5,436.17 crore from selling a stake in SBI Life Insurance Co., also reported that fresh slippages declined sharply to ₹9,026 crore from ₹26,249 crore in the first quarter.

EBITDA for the quarter fell by 19.2% to Rs 181 cr as compared to corresponding quarter in the previous year with a corresponding margin contraction of 286 bps. As a percentage of total advances, net NPAs declined 54 basis points sequentially to 5.43 per cent. "During the quarter, fresh slippage to NPA category was around Rs 2,000 crore", the lender's Managing Director and CEO Usha Ananthasubramanian told reporters here.

Retail advances grew by 13 per cent to Rs 5,04,777 crore in September 2017.

Investors cheered the bank's finances as it posted less than expected rise in bad loans and aggressive provisioning for the cases referred to the bankruptcy courts.