State Bank of India (SBI) on Friday reported a standalone net profit of ₹2,312 crore in the first quarter ended June 30, 2019, compared to a net loss of ₹4,876 crore in the year ago period.
The bank also reported higher fresh slippages of ₹16,212 crore in Q1FY20 against ₹7,505 crore in the preceding (Jan-March 2019) quarter.
Higher slippages, among others, arose from an exposure (as part of a consortium) of ₹2,014 crore to a ‘Mahanavratna’ (government entity), which was performing in its own book but had to be treated as non-performing due to the exposure of another consortium bank turning sour; slippages of about ₹2,000 crore due to the Maharashtra Government implementing agriculture debt waiver scheme and slippages from the SME segment.
SBI Chairman Rajnish Kumar expects the slippage ratio (fresh accretion of NPAs during the year/total standard assets at the beginning of the year) to decline below 2 per cent by March-end 2020 as against 2.83 per cent in the June 2019 quarter.
Gross NPAs (GNPAs) declined by ₹4,256 crore during the quarter to ₹1,68,494 crore. In percentage terms, GNPAs, as at June-end 2019, were static at 7.53 per cent of gross advances vis-a-vis the preceding quarter.
Net NPAs nudged up a tad to 3.07 per cent of net advances against 3.01 per cent in the preceding quarter.
The Bank is planning to raise ₹7,000 crore by issuing additional Tier-I bonds. It may raise capital via an equity issuance, depending on the growth story and the market circumstances. SBI has shareholders’ approval to raise ₹20,000 crore via equity. It is seeking to list its subsidiary SBI Card by the last quarter of the current financial year.
Expected recovery
Of SBI’s 453 accounts admitted to the National Company Law Tribunal (NCLT) aggregating ₹1,13,809 crore, three accounts are in an advanced stage of resolution with expected recovery of ₹16,000 crore, Kumar said.
He added that the government has moved quickly in effecting amendments to the Insolvency and Bankruptcy Code, and the outlook for recoveries remains positive.