State Bank of India, the country’s largest bank, saw its net profit in the fourth quarter of financial year 2013-14 dip 7.82 per cent to ₹3,041 crore from ₹3,299 crore in the year-ago period.

SBI chairperson Arundhati Bhattacharya said last year that the environment was “challenging” and higher provisioning, especially for non-performing assets, weighed on profits.

Total income during the quarter, however, rose 16.82 per cent to ₹42,443 crore (₹36,331 crore).

Asset quality improves For the full-year (2013-14), SBI’s net profit was down 23 per cent at ₹10,891 crore (from ₹14,105 crore in the year-ago period).

The chairperson said the bank utilised a counter-cyclical provisioning buffer of ₹750 crore to make specific provisions towards NPAs.

Measures to improve asset quality, she said, resulted in reduction in gross NPAs by 78 basis points (bps) sequentially, from 5.73 per cent in Q3 to 4.95 per cent in Q4.

Net NPAs declined by 67 bps to 2.57 per cent in the fourth quarter. The bank reported lower fresh slippages at ₹7,947 crore in Q4 (₹11,438 crore in Q3). For the full year, the gross NPA and restructured standard assets ratio stood at 8.41 per cent. The SBI chief said the SME (small and medium enterprise) loan book had to be contracted because of its trend towards impairment. Some 4,667 SME accounts, she said, were stressed.

SBI has set up a special panel to monitor and restructure SME sector loans. Other stressed sectors included engineering, textiles and pharmaceuticals, Bhattacharya said.

The stress on loan assets should ease and the working capital cycle could be less stretched in 2014-15, she added.

The SBI stock shot up 9.69 per cent to close at ₹2,755 on the BSE.

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