SBI’s Q1FY12 Consolidated PAT falls 25%

State Bank of India’s consolidated net profit registered a decline of over 25% y-o-y during Q1FY12, hit by higher provisions.

       

State Bank of India, the country’s largest commercial bank in terms of profits and assets, continues to be plagued by rising provisions as it posted a decline of 25.3% in its consolidated net profit to Rs. 2,512.47 crore during first quarter ended June 30, 2011, compared to Rs. 3,365.26 crore in the corresponding quarter of the previous financial year. Higher provisioning had nearly wiped out the banking behemoth’s net profit in the preceding quarter ending March 31, 2011 when a sharp erosion of 99% led the bank post its lowest net profit in the last 12 years at Rs. 20.88 crore, from Rs 1,866 crore in Jan-March quarter of FY 2010.

The bank’s total provisions grew at a hefty 168% to Rs. 4,157 crore, during the April-June quarter of FY 2011-12. The provisions for NPAs (Non-Performing Assets) formed a large chunk of the overall provisions at Rs. 2,782 crore, jumping sharply from Rs. 1,733 crore in the same quarter last year. The sharp rise in provision was led by new provisioning norms issued by the RBI in April’11 which require banks to raise provisioning norms to 15% from 10% earlier on all sub-standard assets (an asset is classified as sub-standard where the repayment is due for more than 60 days), besides the apex bank also hiked the standard asset provisioning requirement on teaser loans by 5 times to 2%; SBI, which withdrew its teaser loan schemes on housing and auto loans some time back still had an exposure of nearly Rs. 25,000 crore at the April-end. The bank’s NPAs stood at 1.61% in the June quarter, against 1.63% in the preceding March quarter of the previous fiscal year, while its Capital Adequacy Ratio (CAR) stood at 11.6%. 

The PSB behemoth’s consolidated total income grew by 19.25% to Rs. 39,126 crore from Rs. 32,808 crore, during the said period. Also, its consolidated Net Interest Income (NII) surged about 33% to Rs 9,699 crore.

The consolidated result of India’s largest lender also includes results of its five associate banks viz. State Bank of Mysore, State Bank of Patiala, State Bank of Hyderabad, State Bank of Bikaner and Jaipur (SBBJ) and State Bank of Travancore (SBT), besides other subsidiaries.

On a standalone basis, the bank posted a decline of 45.7% in its net profit to Rs. 1583.6 crore in the April-June 2011 quarter, against Rs. 2914.2 crore in the same quarter a year ago. Its total income, however, grew by 25.24% to Rs. 27,731.67 crore from Rs. 22,142 crore, during the period under review.

The bank’s shares, which closed at Rs. 2,197 on August 12, are hovering near their 52-week low of Rs. 2,120 touched on June 20 this year.

Amit
Chief Editor
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