Net profit came in at 1.12 billion rupees ($17.4 million) for the quarter ended December 31, compared with 2.53 billion rupees a year ago, said the country's third-largest state-run lender by assets. Its net non-performing assets rose from 5.43% to 5.61%.
Provisions: Credit costs or the percentage of provisioning against total advances is expected to rise because of fresh loan slippages and the bank's strategy to shore up provision coverage ratio. Additionally, the Street is also taking comfort from the fact that the bank has two additional buffers-stressed standard assets provisions of Rs7,916 crore and counter-cyclical provision buffer of Rs1,250 crore.
A bulk Rs 10,000 crore of divergences were from the power sector and Kumar said further pain is in the offing, with high exposure to the sector. During the quarter, as bond yields straightened, SBI booked a treasury loss of Rs 3,260 crore, dragging down the overall treasury revenue by 8.7 per cent at Rs 20,091.3 crore compared to Rs 22,000.2 crore in the previous quarter.
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The divergences found by RBI had a net impact of a little over Rs 16,000 crore in the slippages for the current quarter, as it had already recognised over Rs 2,800 crore as NPAs in the June quarter, while there was an upgrade in one account of over Rs 4,000 crore.
"In case of our bank, the additional provision of Rs 705 crore is required to be provided by March and the bank on prudent basis has made the provisions in current quarter itself", the bank said. The growth in retail loans stood at 13.59%, and that in agricultural loans at 5.88%.
The bank saw its non-interest income decline by 29.75 per cent, from Rs. 11,507 crore to Rs. 8,084 crore, as net interest income plunged due to mark-to-market losses from its treasury operations. "We are at the end of the NPA cycle and the scenario for next year looks very good".
Stock of the bank closed 1.68 per cent down at Rs 296.40 apiece on BSE today.