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SBI posts record net loss of Rs 7,718 cr in Q4 on higher NPAs

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New Delhi, May 22 : The country’s largest lender SBI today reported a record standalone net loss of Rs 7,718 crore in the fourth quarter ended March, mainly due to sharp rise in provisioning for bad loans.

Besides, 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.

The bank had registered a net profit of Rs 2,815 crore in the corresponding quarter of preceding fiscal ended March 2017.

Compared sequentially, the loss in March quarter widened from Rs 2,416 crore net loss in December quarter.

For the full year, the bank has reported a net loss of Rs 6,547 crore, while there was a net profit of Rs 10,484 crore in 2016-17.

“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 statement.

In the March quarter, the bank’s provisions for non-performing assets (NPAs) jumped by 119 per cent to Rs 24,080 crore as against Rs 10,993 crore in same period of 2016-17, showed the bank’s regulatory filing to exchanges.

Overall provisioning and contingencies were raised to Rs 28,096 crore for the fourth quarter compared to Rs 11,740 crore in the year-ago period.

The bank also experienced decline in its operating profit, net interest income during the quarter. However, its non-interest income has improved.

SBI said recovery in written-off accounts registered a robust growth of 21.18 per cent in March quarter.

Citing RBI’s circular of April 2017, SBI said the banks are required to make provisions at a higher rates in respect of advances to stressed sectors of the economy.

Besides, in cases of NCLT accounts the provisioning requirements is reduced from 50 per cent of secured portion to 40 per cent of secured portion as on March 31, 2018.

“Based on the prospects of recovery, bank has availed the relaxation in a few accounts,” it said.

Income in the March quarter, however, was up at Rs 68,436 crore as against Rs 57,720 crore in the same period of 2016-17. For the full year, the total income stood at Rs 2,59,664 crore up from Rs 2,10,979 crore.

In the asset quality, there was a further dent on the bank’s books with gross NPAs, as a percentage of gross loans, jumped to 10.91 per cent from 6.90 per cent as on March-end 2017.

Net NPAs rose to 5.73 per cent of the net advances compared to 3.71 per cent previous fiscal.

In absolute terms, gross NPAs soared to Rs 2,23,427 crore as on March 31, 2018 from Rs 1,12,343 crore by the March-end 2017. Net NPAs were Rs 1,10,855 crore compared to Rs 58,277 crore.

The lender said it remains well capitalised with common equity tier 1 (CET 1) improving by 0.27 per cent year-on-year to 9.68 per cent as on March 2018.

Tier 1 ratio improved by 0.31 per cent to 10.36 per cent, while the overall CAR (Capital Adequacy Ratio) remained at 12.60 per cent, well above the regulatory requirements.

Stock of SBI closed 3.69 per cent up at Rs 254.15 on BSE.

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