SBI Q4 profit jumps more than twofold, bad loan ratio drops
State Bank of India (
Analysts on average had expected a net profit of 28.33 billion rupees for the lender, according to data compiled by Thomson Reuters.
A record $150 billion of soured assets in India's banking sector has been a concern for the regulator and the government, which controls 20-plus lenders that dominate the sector.
While SBI has fared better than its state-run peers in managing its bad assets, investors remain wary due to its heavy exposure to stressed industries such as steel and power.
Also read: Small businesses suffer as India's bruised banks sit on deposits
This month, the government tweaked its laws, giving its central bank greater power to identify and enforce resolution on specific soured loans.Gross bad loans as a percentage of total loans for SBI , which accounts for more than a fifth of India's total banking assets, fell to 6.9 percent in March from 7.23 percent in December.
On an absolute basis, however, gross bad loans increased to 1.12 trillion rupees at end-March from 1.08 trillion rupees in December.
Provisions for bad loans fell 9.4 percent from a year earlier to 109.93 billion rupees in the March quarter.
Net interest income rose 17.3 percent from a year earlier to 180.71 billion rupees in the March quarter. Fee income rose 4.9 percent from a year earlier to 60.78 billion rupees.
SBI, which merged its five subsidiary banks with itself and also took over a niche lender to women in the first consolidation move in the sector, also faces challenges of smoothly integrating the operations.Chairman Arundhati Bhattacharya told Reuters last month that the bank expected a boost to annual profit in three years on cost and efficiency gains from the absorption of the subsidiaries.
Also read: SBI chairman positive of the bad loan situation in the country
Shares in SBI were trading 2.5 percent higher after the results in a Mumbai market that was down 0.1 percent.($1 = 64.9400 rupees)
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