The country’s largest lender, State Bank of India, saw its net profit rise for the first time in six quarters, touching ₹3,349 crore in the April to June period.

Profit inched up 3 per cent on the back of stable loan and interest income growth. It was muted due to a substantial increase in the provision for bad loans, which soared 72 per cent to ₹3,903 crore, against ₹2,266 crore in the year-ago period.

“Pressures on the asset quality front, as such, do appear to be subsiding. However, we need the economy to pick up to see an appreciable change in asset quality,” said Arundhati Bhattacharya, Chairman and Managing Director.

The bank’s net interest income, the difference between interest earned and expended, grew 15 per cent, while other income fell 5 per cent to ₹4,252 crore during the quarter.

Aided by more recoveries and lower slippages, gross bad loans or non-performing assets (NPAs) declined marginally, to ₹60,434 crore (₹60,891 crore). The gross NPA ratio was at 4.90 per cent (5.56 per cent).

Slippage reduced Recoveries by the bank were at ₹3,185 crore, while upgradations stood at ₹1,362 crore. Fresh slippage declined 28 per cent to ₹9,932 crore (₹13,766 crore).

By the end of June, both total advances and deposits grew 13 per cent year-on-year.

On the credit outlook for FY15, Bhattacharya said: “I would like to stick to 15 per cent. Again, this depends on a few things happening. While we are seeing de-clogging of many projects, resulting in people coming back and drawing or taking disbursements, we are still not seeing any new projects actually being put to us for clearances.”

On a consolidated basis, the net profit for the first quarter was up at ₹4,448 crore (₹4,299 crore).

At present, SBI has no plans to raise long-term bonds, allowed by the RBI recently.

SBI’s shares closed at ₹2,415.25 on the BSE, down 0.9 per cent.

Related Topics