SBI Net Profit Falls On Higher Provisions, Shares Slump 4%

State Bank of India (SBI), India's biggest lender, reported a 35 per cent drop in its standalone net profit at Rs 2,538 for the September quarter as it provisions for bad loans soared. SBI's net profit was below the Street's estimates, sending its shares 4 per cent lower. 

The state-owned lender had reported a net profit of Rs 3,879 crore in the September quarter of last year. 

SBI's net interest income (NII), which is the difference between interest earned on advances over interest expended on deposits, rose to Rs 14,437 crore compared to Rs 14,253 crore in the corresponding quarter of last fiscal.  

Analysts polled by NDTV Profit had estimated its net profit at Rs 2,593 crore, while its net interest income was seen at Rs 13,662 crore. Although SBI's NII was above the Street's estimates, a 100 per cent jump in its provisions (for non-performing loans ) dented its net profit. 

SBI made a provision of Rs 7,670 crore for non-performing assets, compared to Rs 3,842 crore last year. 

Its gross non-performing (GNPA) loans as a percentage of total advances increased to 7.14 per cent compared to 6.94 per cent in the June quarter. Analysts were expecting its GNPA to remains around 6.9 per cent in the September quarter. On an absolute basis, SBI's GNPA stood at Rs 1.06 lakh crore compared to Rs 1.02 lakh crore sequentially. 

Meanwhile, its net non-performing assets, which is GNPA minus provisions, rose to 4.19 per cent of advances against 4.05 per cent in the June quarter. 

SBI shares closed 2.95 per cent lower at Rs 273 apiece compared to 2.28 per cent fall in the industry benchmark Nifty Bank.