State Bank of India Q4 profit falls, shares drop
REUTERS - State Bank of India, the country's largest lender, posted its first quarterly net profit drop in two years, missing market estimates after being dragged down by lower interest income and higher provisions for loan losses.
The state-run bank posted net profit of 32.99 billion rupees in the January-March quarter, compared with 40.50 billion rupees in the same period a year ago. Net interest income, the difference between interest earned and interest expended, fell 4.4 percent to 110.8 billion rupees.
Analysts, on average, had expected net profit of 37.9 billion rupees, according to Thomson Reuters I/B/E/S.
Shares in SBI ended with losses of 7.85 percent, compared with a near 2 percent fall in the BSE Sensex.
Asset quality at the bank worsened over the past year. Non-performing loans as a proportion of total assets rose to 4.75 percent, the highest among Indian banks, from 4.4 percent at the end of March last year. It stood at 5.3 percent at end-December.
Most Indian state banks, including Bank of Baroda (BOB.NS), Punjab National Bank (PNBK.NS) and Bank of India Ltd (BOI.NS) have this month posted drops in quarterly profits, while private sector rivals ICICI Bank Ltd (ICBK.NS) and HDFC Bank Ltd (HDBK.NS) continued to post higher profit growth on stable asset quality.
Overall, bad loans have risen to a record in India as the country's worst economic slowdown in a decade clouds the outlook for banks including SBI, which accounts for a quarter of all loans and deposits in the country.
Government-controlled SBI, exposed to many of India's biggest, most troubled borrowers including Suzlon Energy Ltd (SUZL.NS) and Kingfisher Airlines Ltd (KING.NS) has said it would ease payment terms on loans of 37 billion rupees in the March quarter. Details were not immediately available.
In the year to March 2013, Indian banks sought to restructure a record $16.6 billion loans through the Corporate Debt Restructuring (CDR) Cell, an RBI-approved consortium of lenders - an increase of 38 percent on the year before.
(Reporting by Swati Pandey in MUMBAI; additional reporting by Abhishek Vishnoi; Editing by Daniel Magnowski)
- Tweet this
- Share this
- Digg this
- In India, rice replaces ice in bucket challenge
- Ukraine seeks to join NATO; defiant Putin compares Kiev to Nazis
- U.S. strikes have slowed Iraq militants but not weakened them - Pentagon
- Comedian Joan Rivers remains in serious condition at N.Y. hospital
- UPDATE 1-Don't mess with nuclear Russia, Putin says
India's economy grew by a faster-than-expected 5.7 percent in the three months through June, its fastest pace in two-and-a- half years, helped by a rebound in manufacturing and mining sectors, government data showed on Friday. Full Article
Exclusive: Reliance plans $13 billion projects including new refinery. Full Article
In race for bigger margins, drug makers willing to lose the India "advantage". Full Article