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SBI associate State Bank of Bikaner & Jaipur’s net profit fell sharply by 72 per cent to Rs 57.84 crore in the quarter ended December 31, on mounting bad loans and fall in core income.
The bank’s net profit in the October-December quarter of the previous fiscal stood at Rs 206.13, State Bank of Bikaner & Jaipur (SBBJ) said in a BSE filing today.
“The total income of the bank rose marginally at Rs 2,645.82 crore during the quarter under review as against Rs 2,636.56 crore earned in the same period a year ago,” according to the filing.
The bank further said, interest income, its main source of profit, fell to Rs 2,262.28 crore during the October-December period from Rs 2,408.22 crore in the year-ago period.
The asset quality of the bank slipped further with gross non-performing assets (NPAs) rising to 11.19 per cent of gross advances as on December 31, 2016 from 4.22 per cent a year ago and 10.50 per cent in the previous quarter.
Net NPAs hit 8.26 per cent of net loans as on December 31, 2016 from 2.20 per cent a year ago and 7.17 per cent in the previous quarter.
Year-on-year, the amount of gross NPAs increased to Rs 7,917.35 crore from Rs 3,079.01 crore. And the net NAP amount rose to Rs 5,649.83 crore as against Rs 1,563.96 crore.
The huge jump in bad loans led to provisions and contingencies being raised to Rs 426.91 crore for the quarter from Rs 236.20 crore a year earlier.
Of the total provisioning, that of NPAs was at Rs 400.58 crore, against Rs 197.91 crore a year ago.
Further, the bank said its board of directors in September approved the scheme of acquisition by parent State Bank of India (SBI).
“From the quarter ended September 2016, as a pre-merger exercise, the bank changed its policy for classifying common loans and advances within SBI Group,” it added.
“As advised by SBI, the bank has reclassified/ realigned and/ or made incremental provision in nine such eligible accounts. This has resulted in increase of gross NPAs by Rs 9.62 crore, incremental provision of Rs 53.63 crore, interest reversal of Rs 0.59 crore and its consequential impact on various ratios,” SBBJ said.
Also, the bank made a provision of Rs 56.08 crore towards pension during the December quarter of this fiscal.
Shares of the bank closed 2.12 per cent down at Rs 681.95 apiece on BSE.
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