SBI quarterly net profit nose-dives on increased provisions

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The country's largest lender, State Bank of India (SBI), on Tuesday reported a sharp fall in net profit for the quarter ended March 31 at 20.9 crores, as various provisioning measures, including those for pension, hit the bank's bottom-line.

During the quarter under review, the state-owned banking behemoth saw provisions rise to 7,420.89 crores, which includes pensions, gratuity and non-performing assets. SBI's net profit for the January-March quarter fell to a meagre 20.88 crores, compared to 1,866 crores in the previous corresponding quarter.

The results, which were much lower than what analysts expected, had a negative effect on the 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange. The heavyweight scrip fell a whopping 8 per cent in the afternoon at the BSE, pulling down the Sensex 247.94 points at 18,097.09 points. Interest earned during the quarter rose to 21,721.35 crores against 17,965.59 crores in the like period of last fiscal.

Gross non-performing assets were logged at 3.28 per cent, compared to 3.05 per cent in the quarter ended March 31, 2010. For the year 2010-11, net profit dipped 9.8 per cent to 8,264.52 crores as against 9,166.05 crores in the previous fiscal. Interest earned during the financial year went up to 81,394.36 crores compared to 70,993.92 crores in the previous fiscal. The bank's board recommended a dividend of 30 per share.