State Bank of India on Friday said its balance sheet has been fully repaired in FY2019 even as it recorded a turnaround performance in the fourth quarter.

The country’s largest bank reported a net profit of ₹838 crore against a net loss of ₹7,718 crore in the same period the previous year. It reported a substantial improvement in the asset quality, with lower fresh slippages and better recoveries. The profit in the reporting quarter came on the back of a 15 per cent year-on-year (Y-o-Y) increase in the net interest income (the difference between interest earned and interest expended) at ₹22,954 crore and lower loan-loss provisions of ₹17,336 crore (down 28 per cent Y-o-Y).

For the full-year ended March, the bank reported a net profit of ₹862 crore against a net loss of ₹6,547 crore in FY18.

Fee income, including loan processing charges, commission on government business, letter of credit, bank guarantee and remittance and collection, was up 2 per cent Y-o-Y at ₹8,589 crore in the just ended quarter. .

During the quarter, fresh slippages were almost 78 per cent lower Y-o-Y at ₹7,505 crore. The bank reported a net decline of ₹15,015 crore in gross non-performing assets (NPAs) against a net increase of ₹24,286 crore in the year-ago period. Recovery, including upgradation, soared to ₹5,712 crore (₹85 crore in the year-ago quarter).

Highlighting the decline in gross and net NPAs and the substantial improvement in the provision coverage ratio, Chairman Rajnish Kumar said: “This shows that the balance sheet of the bank has been fully repaired. Going forward, the impact of the shadow of the past will not be there on the earnings of the bank.”

Gross NPAs declined from 10.91 per cent of gross advances as at end-March 2018 to 7.53 per cent as at end-March 2019 and the net NPAs fell from 5.73 per cent of net advances to 3.01 per cent. The PCR improved from 66 per cent to 79 per cent. The bank said recovery in FY19 was at an all-time high of ₹31,512 crore. Of this, ₹13,836 crore came through the Insolvency and Bankruptcy Resolution process.

Kumar emphasised that “...In the case of all the three major accounts — Essar Steel, Alok Industries and Bhushan Power and Steel which are in very advanced stage of resolution — we have made 100 per cent provision. And, as a result, almost ₹16,000 crore is what is recoverable as soon as the judicial process is over. This shows the strength of the balance sheet as we speak.”

 

 

 

 

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