Country's largest lender State Bank of India (SBI) on Saturday reported a 45.6 per cent fall in stand alone net profit at Rs1,584 crore for the first quarter of this fiscal due to higher provisioning for bad loans and depreciation on investments.
The bank had a net profit of Rs2,914 crore in the April- June quarter of the last fiscal. "We had to make higher loan provisions as per the stiffer prudential provisioning norms of the Reserve Bank across all grades of assets," SBI Chairman Pratip Chaudhuri told reporters after announcing the quarterly numbers here.
There is an unexpected event in the form of depreciation in bonds and the loss due to that is Rs1,048 crore. The loss on account of equity investment is to the tune of Rs300 crore, he said.
On consolidated basis, the bank's net profit grew by 25.3 per cent to Rs2,512.4 crore in the quarter against Rs3,365.2 crore in the year-ago period. The consolidated total income increased to Rs39,126 crore in April-June quarter of 2011 from Rs32,808 crore in the same period last fiscal. The total provisions increased by 75 per cent over the last year to Rs2,439 crore. Of this, the bank made a specific provision of Rs550 crore under counter cyclical buffer.
SBI's total income, however, increased to Rs27,731.6 crore in the quarter under review from Rs22,142 crore in the year-ago period. Operating profit recorded a growth of 18.06 per cent at Rs7,242 crore compared to Rs6,134 in the first quarter of previous fiscal, he said.
He also said that the core operation of the bank has shown significant growth in the quarter and has reached all- time high level. The net interest income (NII) surged by 32.8 per cent to Rs9,700 crore compared to Rs7,304 crore in the same quarter a year ago.
Net Interest Margin (NIM) is also high. It has improved to 3.62 per cent at the end of June 2011, from 3.18 per cent as on June 2010, he said.
"NIM would continue upwards of 3.5 per cent for the current fiscal," he said. The bank's non-interest income declined by 4.2 per cent to Rs3,534 crore from Rs3,690 crore in the April-June period of 2010.
As far as asset quality of the bank is concerned, Chaudhuri said there has been a net increase of Rs2,442 crore in non-performing assets (NPAs) during the quarter due to continued stress in mid corporate, SME and agri segments.
Of Rs1,060 crore increase in corporate sector NPAs, as much as Rs796 crore has come from the standard restructured portfolio.