Higher provisioning for rising bad loans saw the country’s largest lender State Bank of India post a 35 per cent slump in net profit at Rs 2,375 crore in the second quarter ended September 30. In the July-September period last year, the bank made a profit of Rs 3,658 crore.
SBI Chairperson Arundhati Bhattacharya said: “There is more pain ahead for the bank.”
The bank set aside Rs 2,645 crore during the quarter as a cover against potential bad loans. For the same period last year, it had set aside Rs 1,837 crore.
The mid-corporate and small and medium enterprises segments accounted for about 63 per cent of the bank’s non-performing assets (NPA). NPAs rose 30 per cent to Rs 64,206 crore (Rs 49,202 crore) during the quarter under review. Gross NPAs as a percentage of total advances rose to 5.64 per cent from 5.15 per cent a year ago.
Accounts slipping into non-performing assets increased by Rs 3,315 crore on a net basis during the quarter. Most were from the power, infrastructure and iron and steel segments.
“We are trying to capture early-warning signals and push these accounts into restructuring to ensure that these do not lead to more trouble,” said Bhattacharya.
The SBI Chairperson said the bank will raise Rs 8,000-9,000 crore during the year through qualified institutional placements. This is in addition to the Rs 2,000-crore capital infusion the Government has agreed to make.
SBI’s shares closed at Rs 1,697.85, up 1.34 per cent, on the BSE.