Lender posts Rs 7,718 cr loss in Q4 as provisions for NPAs jump by 119%
New Delhi : State Bank of India (SBI), the country’s largest lender, on Tuesday reported its deepest-ever quarterly net loss due to sharp rise in provisioning for bad loans.
A lower investment income as well as higher provisioning for wage revision also dented the profits of the state-owned lender, SBI said in a statement.
SBI recoded a standalone net loss of Rs 7,718 crore in the fourth quarter ended March as against a net profit of Rs 2,815 crore in the same period in the last year.
Compared sequentially, the loss in the quarter widened from Rs 2,416 crore net loss in December quarter.
However, shares of the state-run lender rose nearly 5 per cent. The stock gained 3.69 per cent to end at Rs 254.15 on BSE. On NSE, its shares surged 4.60 per cent to close at Rs 255.70.
“Due to increase in provisions for NPAs and mark-to-market (MTM) on investment portfolio, the bank incurred a net loss of Rs 6,547 crore in 2017-18,” it said.
In the March quarter, the bank’s provisions for non-performing assets jumped by 119 per cent to Rs 24,080 crore as against Rs 10,993 crore in same period of 2016-17, the bank said in its regulatory filing. Overall provisioning and contingencies were raised to Rs 28,096 crore for the quarter compared to Rs 11,740 crore in the year-ago period. The bank expects a compound annual growth rate for credit of 12 per cent by 2020, and aims for a gross non-performing advances ratio of under 6 per cent by March 2020, its chairman Rajnish Kumar said. The bank also experienced decline in its operating profit, net interest income during the quarter.
Listing of general insurance, card arm likely by FY20
MUMBAI: SBI is looking at an initial public offering of SBI General Insurance in the current financial year started April, and may also consider divesting 10 per cent stake in SBI Card through listing in 2019-20, the bank said. Its chairman Rajnish Kumar said unlocking value from these subsidiaries through sale of stake was part of the bank’s Rs 20,000 crore capital raising plan for 2018-19, as these arms were performing well. SBI owns 74 per cent stake in SBI Card, while Carlyle holds 26 per cent.
Similarly, the bank owns 74 per cent in the general insurer, while partner Insurance Australia Group owns 26 per cent. Kumar said listing SBI Life Insurance in 2017-18 gave the bank flexibility to consider more dilution there, if an opportunity emerged.
