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SBI net up 12%, stock dips 7.2% on bad loans
India’s largest bank, State Bank of India (SBI), on Wednesday announced a 12% year-on-year rise in net profit at Rs2,810 crore for the quarter ended September against Rs2,501 crore last year, driven by a growth in advances.
India’s largest bank, State Bank of India (SBI), on Wednesday announced a 12% year-on-year rise in net profit at Rs2,810 crore for the quarter ended September against Rs2,501 crore last year, driven by a growth in advances.
However, a rise in non-performing assets (NPAs) or bad assets disappointed investors, sending its share down 7%, or Rs135, to Rs1863 on the Bombay Stock Exchange.
“We see pressure on asset quality and provided adequately for it,” said Pratip Chaudhuri, chairman and managing director, SBI. “Looking at the stress, there is a possibility of the gross NPA to go up.”
The bank’s gross NPA increased to 4.2% of the total assets as on September end, from 3.4% a year ago. Increase in bad loans led to a 35% rise in loan loss provisions to Rs2,921 crore during the July-September quarter.
The bank’s net interest margin, a key measure of profitability, rose to 3.7% at the end of September against 3.3% at the end of September 2010.
