SBI's insurer stake sale lifts net to ₹1581.55 cr

SBI Q2 profit slumps 38% YoY to Rs 1,582 crore as provisions more than double

The fresh slippages in Q1 too were staggering at Rs 26,249 crore.

SBI, the nation's top lender with a share of more than fifth of the banking assets, reported on Friday a lower-than-expected profit, but its bad loan additions during the three months to end-September slowed sharply and pushed the overall bad-loan ratio down. Net NPAs increased to Rs 97,896.29 crore as against Rs 60,013.45 crore.

SBI's total provisioning, including for non-performing assets (NPAs), or bad loans, for the quarter in consideration at Rs 18,418 crore were a whopping 87 per cent over the previous quarter's figure of Rs 9,869 crore and also 27 per cent higher over the provisioning in the same period a year ago. The stock market reacted positively to the improvement in asset quality.

MD and CEO of Allahabad Bank Usha Ananthasubramanian said that the bank had made higher provisioning during the quarter as the provision coverage ratio increased to 54.33 per cent in the second quarter as against Rs 47.60 crore in the previous second quarter. Other income for the quarter on review went up 28.1 percent to Rs 10,579.91 crore from Rs 8,261.44 crore in the same quarter previous year. Share price gained 6.2 per cent to Rs 333.2 per share on the BSE.

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The huge growth was driven by part sale of stake in SBI Life Insurance in a public offering. PCR stood at 58.57 per cent at the end of September 2017.

The company declared its September 2017 quarter results on November 10, 2017, posting a revenue decline by 3% and net profit declined by 62.1% as compared to corresponding quarter in the previous year.

Instead, the NPAs worsened from a year ago, with gross NPAs at 7.14 per cent and net NPAs at 4.19 per cent as on September 2016. SBI has shown fall in gross NPAs at 9.83 per cent from 9.97 per cent QoQ. The lender expects loan growth to be about 5% for the current financial year. "Corporate credit for the next two quarters will remain muted because even the infrastructure spends undertaken by government will come with a time-lag", said SBI chief. The growth will be be around consumption (retail), bank executives said. Home loans grew by 12.7 per cent to Rs 2,90,450 crore as of September 2017.

On capital raising plans, the SBI chief did not indicate specific steps to raise more capital but added that at present the capital position of the bank was strong and would like it to be stronger.

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