Money & Banking

SBI net loss widens to over ₹7,700 crore in Q4

Our Bureau Mumbai | Updated on May 22, 2018 Published on May 22, 2018

Rajnish Kumar, Chairman   -  BL

Hit by higher loan loss provisions and wage arrears

Huge provision towards loan loss, market-to-market treasury loss, an enhancement in the gratuity limit and arrears of wages saw State Bank of India’s net loss widen in the fourth quarter even as it projected FY2019 as a ‘year of hope’ in view of the completion of the recognition of stressed assets and the expectation of higher credit and deposit growth.

Net loss in the quarter ended March 31 widened to ₹7,718 crore from ₹3,442 crore in the year-ago period.

In the financial year ended March 31, the net loss was higher at ₹6,547 crore against ₹1,805 crore in the previous financial year.

Net interest income (the difference between interest earned and interest expended) declined 5 per cent year-on-year at ₹19,974 crore (against 21,065 crore in the year-ago quarter).

Non-interest income, comprising fee income, profit/loss on sale of investments, forex income, dividend income and recovery in written-off accounts, nudged up 2 per cent to ₹12,495 crore (₹12,222 crore).

Rajnish Kumar, Chairman, said: “The loss incurred by the bank may look big, but what you have to look at is the strength of the balance sheet.”

He added: “...Despite the huge provisions, the capital position continues to be strong...(high) risk-weighted assets are down by 720 bps and this approach will continue. We will use our capital efficiently...We have to be very mindful of the fact that the risk-reward martix should be in favour of the bank. We are poised for growth in a risk-mitigated manner.”

Loan loss provisions were up 25 per cent year-on-year (yoy) to ₹24,080 crore (from ₹19,323 crore). Investment depreciation provisions soared to ₹4,761 crore (from ₹852 crore). Provision towards the doubling of the gratuity limit to ₹20 lakh was ₹902.50 crore.

Fresh slippages jumped to ₹33,670 crore from ₹9,755 crore in the year-ago quarter. This is due to accounts in the watchlist as well as those that were being resolved under the then-extant instructions on resolution of stressed assets getting downgraded following implementation of the RBI’s new framework of resolution of stressed assets from February 12.

NPAs rise

Gross non-performing assets rose to ₹2,23,427 crore as at March-end 2018 against ₹1,77,866 crore as at March-end 2017. GNPAs rose to 10.91 per cent of gross advances as at March-end 2018 against 9.11 per cent as at March-end 2017.

Total deposits increased by 4.68 per cent y-o-y to ₹27,06,343 crore. Low-cost current account, savings account increased to 45.68 per cent of domestic deposits (from 44.40 per cent). Total advances were up 4.91 per cent y-o-y to ₹20,48,387 crore.

SBI expects credit and deposit growth of 10 per cent and 9 per cent, respectively in FY2019. The bank’s shares closed at ₹254.15, up 3.69 per cent over the previous close on the BSE.

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Published on May 22, 2018
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