The fourth highest recorded operating profit of ₹427 crore in 29 quarters was not enough to prevent State Bank of Travancore (SBT) from slipping into the red during the first quarter of this fiscal.

The bank reported its first quarterly loss of ₹743 crore (against a net profit of ₹81.32 crore a year ago) under the weight of higher provisions of ₹1,170 crore for non-performing assets (NPAs) and additional prudential provisions for other stressed accounts.

Biting the bullet “We’ve bitten the bullet this time,” CR Sasikumar, Managing Director, SBT, told BusinessLine while analysing the results.

The bank had to transfer assets worth ₹3,200 crore to the NPA list this quarter. “Virtually, we’ve doubled our NPA portfolio forfeiting the interest part as well,” Sasikumar said.

The slippages were reported mostly across seven large accounts in the steel and textiles segments.

Besides these, it had some accounts which are standard in its books for now but in the watch list as well.

“I’ve set apart ₹532 crore in additional provision for those accounts. The silver lining is that even if they go to the NPA list the next quarter, I need not make additional provisions.”

Worst is behind Sasikumar expects that the worst is behind for the bank. It should do better in the next quarters since it has adequate provisions, including for assets not classified as bad, yet. Also, its retail portfolio is growing.

Despite shedding bulk assets, deposits have grown handsomely. The de-growth in the agriculture sector has bottomed out.

“With a little bit of effort, I’m hopeful of recovering at least ₹600-700 crore of NPAs during the six or eight months of the year. I should be able to get some traction in writing back some of the provisions.”

On the positive side, the bank has done markedly well on the other income and current account savings account (CASA) fronts.

Other income grew around 35 per cent to ₹351 crore year-on-year on the back of 142 per cent growth in income from treasury operations.