SBI’s September quarter profit rose 30 per cent over the same period last year to Rs 3.658 crore. But this was mainly due to lower loan loss provisions and one-off items. Meanwhile, the stress in the bank’s loan book continues, especially in the SME and mid-corporate segments. Also, fall in margins resulted in muted net interest income growth, impacting profitability.

SBI’s provision for bad loans reduced almost 37 per cent in the September quarter. The bank attributes this to more than enough provisioning made in the June quarter. This along with the write-back of provisions of Rs 260 crore made for investment depreciation and Rs 230 crore profit on investment sale helped overall profit growth.

On the flipside, lending rate cuts and lower credit-deposit ratio contributed to the bank’s domestic net interest margin dipping to 3.68 per cent from 3.86 per cent in the June quarter. It also did not help that the bank had to raise deposit rates and reverse interest income accrued on stressed assets.

Also, asset quality concerns continued unabated with the SME and mid-corporate group showing severe stress. These two segments accounted for more than three-fourth of the fresh slippages in the September quarter.

SBI’s 16 basis points sequential rise in gross non-performing assets was lower than the 50 basis points jump for many public sector banks. But this could have been more had the bank not written off NPAs worth Rs 2,000 crore.

Tax outflow hits Bharti’s profit

Telecom major Bharti Airtel’s revenues in the September quarter grew by 17.4 per cent year-on-year. But its net profits fell by 29.8 per cent. This was mainly due to a sharp 57.4 per cent rise in tax outflows.

In what seems to be a deliberate strategy to improve its subscriber base quality and weed out non-lucrative customers, the company’s mobile subscriber base reduced by 1.38 million during the quarter. This is in contrast to the trend of 3-6 million customer additions over the past many quarters. The improvement in subscriber quality is reflected in the increase in proportion of active subscribers to 91.5 per cent. The company’s realisation per minute has remained stable at 42.6 paisa.

But Bharti saw realisation dip in its African mobile business, as it is still in the process of expanding footprint there.

The company’s other segments — tower and DTH — did well in the September quarter. Tower tenancy sharing factor increased to 1.91 and may touch 2 in the coming quarters. Tower rentals also increased. In the DTH business, Bharti saw its average revenue per user (ARPU) increase, though subscriber additions were a little slow. With mandatory digitisation across metros from November, there seems to be good scope for adding more subscribers.

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