State Bank of India Q4 profit falls, shares drop

Thu May 23, 2013 4:51pm IST

People walk in front of a signboard displayed at the head office of State Bank of India in Mumbai November 9, 2009. REUTERS/Arko Datta/Files

People walk in front of a signboard displayed at the head office of State Bank of India in Mumbai November 9, 2009.

Credit: Reuters/Arko Datta/Files

Related Topics

Stocks

   

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)

FILED UNDER:
  • Most Popular
  • Most Shared

Pending Reform

REUTERS SHOWCASE

Power Theft

Power Theft

India to invest $4 billion to tackle power theft  Full Article 

Debt Funds

Debt Funds

India monitors foreign flows into debt funds, may tighten rules  Full Article 

Bulgari Back in India

Bulgari Back in India

CEO: we shouldn’t have left India so we’re back  Full Article 

 Hindu "Modi-fication"

Hindu "Modi-fication"

Fears grow about Hindu "Modi-fication" of education  Full Article 

Weak Credit

Weak Credit

Hard to hit tax revenue target, credit weak - Jaitley  Full Article 

China Rate Cut

China Rate Cut

China surprises with interest rate cut to spur growth  Full Article 

Gold Imports

Gold Imports

RBI cautious on response to gold import surge  Full Article 

Economic Corridor

Economic Corridor

China commits $45.6 billion for economic corridor with Pakistan  Full Article 

Overseas Funds

Overseas Funds

RBI says overseas borrowed funds can be parked with banks in India  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage