SBI fourth quarter profit down 66%, analysts say this was expected
SBI fourth quarter profit down 66%, analysts say this was expected
State Bank of India, the nation`s top lender by assets, reported a worse-than-expected 66 percent fall in quarterly profit due to sharply higher provisions for bad loans.
The lender, which accounts for nearly a quarter of India`s loans and deposits, said net profit was 12.64 billion rupees ($188.5 million) for the three months to March 31 from 37.42 billion rupees a year earlier.
Analysts on average had expected a net profit of 19.17 billion rupees, according to data compiled by Thomson Reuters.
Gross bad loans as a percentage of total loans rose to 6.5 percent in March from 5.1 percent in December. Provisions for bad loans more than doubled from a year earlier to 121.39 billion rupees.
Aditya Birla Money, in a note said, "SBI results are broadly in line with estimate."
It further said that the results are better when compared to its peers but this has already been factored in since the bank commands premium valuations. It said, "Asset quality stress still there and Groess Non-Performing Assets (GNPA) ratio rose from 5.1% to 6.5% QoQ while Net NPA ratio rose frm 2.89% to 3.81%. Slippages at Rs 303.1 billion vs Rs 207 billion QoQ are still high and shall be negative for the stock."
Analysts said that the guidance given by SBI management on asset quality watchlist remains a key.
(With Reuters)
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