Country's largest lender SBI today reported 71 per cent jump in consolidated net profit to Rs 2,152.2 crore for the December quarter of the current fiscal on account of rise in other income and drop in provisions of bad loans.
It had reported net profit of Rs 1,259.4 crore in the October-December quarter of the last fiscal.
On standalone basis, the State Bank of India reported a 134 per cent rise in net profit to Rs 2,610 crore for the quarter ended December 31, 2016-17.
The bank had reported profit after tax of Rs 1,115 crore in the year-ago quarter.
"Net profit in the quarter rose 134 per cent and this was a function of the fact that in the third quarter of the financial year 2015-16, we took a maximum brunt of asset quality review (AQR) impact, and, therefore, those profits were not in line with what we are doing," SBI chairman Arundhati Bhattacharya said in a concall with reporters.
"In the quarter, the interest income has increased y-o-y by 8.07 per cent as we had lot of inflows in deposits and they have been invested quite well through our treasury. The other income showed a very healthy growth of 58.73 per cent on y-o-y basis," she added.
In December, SBI sold 3.9 per cent stake in its subsidiary SBI Life Insurance for Rs 1,794 crore to KKR and Temasek.
Other income was up 58.73 per cent to Rs 9,662 crore from Rs 6,087 crore, while the interest income grew 8.07 per cent to Rs 43,926 crore from Rs 40,644 crore.
Total income was up 14.67 per cent to Rs 53,588 crore.
Although the bank's total provision increased by 17.10 per cent to Rs 9,933 crore, the loan loss provision dropped by 5 per cent to Rs 7,245 crore from Rs 7,645 crore.
Domestic net interest margin was down to 3.03 per cent from 3.22 per cent in the year-ago period.
Fee income grew 14.30 per cent to Rs 4,011 crore from Rs 3,509 crore last year same quarter.
Gross non performing assets rose to 7.23 per cent from 5.10 per cent in the third quarter of the financial year 2015-16. Net NPA were at 4.24 per cent as against 2.89 per cent.
The bank's fresh slippages during the quarter stood at Rs
10,185 crore.
"The fresh slippages are very much within the guidance that had been given by us. We have guided for above Rs 40,000 crore of fresh slippages for this financial year, of which we have Rs 29,316 crore in the three quarters," Bhattacharya said.
She added that 73 per cent of these were from the watch list, which currently stand at Rs 17,992 crore.
When asked about the outlook on resolution of stressed loan in the fourth quarter, she said: "We were very hopeful that things would start moving in this quarter. The demonetisation has actually put us back by a quarter.
"So, we are working very hard, but I do not really know whether they (resolution) can come in this (fourth) quarter or may be they can slip over to the next year."
The bank recovered Rs 1,003 crore of loans while upgradation stood at Rs 1,059 crore.
It sold Rs 472 crore of bad loans to asset reconstruction companies in the period.
Deposits grew 35.90 per cent to Rs 20,40,778 crore from Rs 16,71,416 crore.
Gross advances were up 4.81 per cent to Rs 14,97,164 crore from Rs 14,28,495 crore.
Bhattacharya said demonetisation had an impact on areas like home loans, agriculture and small and medium enterprises loans.
"However, in January, most of these areas have started doing better and in February they are showing better numbers. Hopefully, by the end of this quarter we would be back to where we were and we do not expect any great fall in the growth," she said.
The bank revised its loan growth target, which was set at 11-12 per cent in the beginning of the year, to 6.5 per cent.
"In the financial year 2016-17, the credit growth will be restricted to around 6.5 per cent and in the next financial year we expect to grow at 11 per cent," Bhattacharya said.
(Reopens BOM 24)
Talking about the merger of its five associate banks- State Bank of Bikaner & Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Travancore (SBT) and two unlisted associate banks - State Bank of Patiala and State Bank of Hyderabad, and Bhartiya Mahila Bank, Bhattacharya said it has been delayed by one quarter.
The bank was earlier targeting to complete the merger process by March 31.
"We are quite ready and as soon as the government notifies the final order, we will be ready to kick it off. We had planned to do it by March, but it is deferred by a quarter due to the demonetisation effect," she said.
She said the process for listing of its life insurance arm- SBI Life Insurance is on.
Bhattacharya said Insurance Australia Group, which is its JV partner in SBI General Insurance, has shown interest in raising the stake.
"Our general insurance JV partner has indicated that they would like to dial up. So, the appointment of the valuer has happened and the valuation exercise is currently on," she said.
In SBI General Insurance, SBI owns 74 per cent while Insurance Australia Group holds the remaining 26 per cent.
She said the new parter for its card business- SBI Cards would be soon finalised.
"We would be able to complete this quite quickly. Most of the negotiations are over and we are very close to completing the deal," Bhattacharya said.
