Mumbai: State Bank of India (SBI) on Tuesday reported a record standalone net loss of Rs 7,718 crore for the quarter ended March 2018 due to further deterioration in its asset quality and sharp rise in provisions against bad loans.
The public sector lender had reported a net profit of Rs 2,814.82 crore during the same period last year. This is the second consecutive quarter where the bank has suffered losses. It reported a net loss of Rs 2,416 crore in Q3FY17. This is also the second highest quarterly loss reported by any bank after the scam hit Punjab National Bank (PNB) posted net loss of Rs 13,417 crore in Q4FY18.
The bank attributed the loss to lower trading income, significant mark to market (MTM) losses due to hardening of bond yields, incremental provision for NPA’s and higher provisioning due to wage revision and enhancement in gratuity ceiling.
While the quantum of loss was much higher than what the market had anticipated, the positive commentary from the management triggered a strong rally in its share prices. “We have put the past behind us even as the last three years have been challenging. Today, what you see is a stronger SBI than two years ago. This is a year of hope and financial year 2020, you can consider to be a year of happiness,” said Rajnish Kumar, chairman, SBI. Responding to his comments, the shares of SBI soared 3.69 per cent on the BSE to end the day at Rs 254.15.
During the quarter, the provisions set against NPAs more than doubled to Rs 24,080 crore as compared to Rs 10,993 crore in Q4FY17. It’s gross NPA ratio (gross NPA as a percentage of advances) for the quarter stood at 10.91 per cent as against 6.90 per cent in Q4FY17 and 10.35 per cent in Q3FY18.
