SBI reports record loss of Rs 7,718 crore on mounting bad loans in Q4

NEW DELHI: The country’s largest lender State Bank of India (SBI) reported a record standalone net loss of Rs 7,718 crore in the fourth quarter (January-March) of the fiscal year 2017-18.
SBI had posted a net profit of Rs 2,815 crore in same period last year.
The loss for the three months to March 31 is much greater than expected as a Reuters survey of 16 analysts had expected the loss to come at Rs 1,285 crore.
The loss may be attributed to mounting bad loans as gross bad loans as a percentage of total loans of the lender rose to 10.91 per cent from 10.35 per cent three months earlier and 6.90 per cent a year prior, according to filing submitted by SBI to the bourses.
The total income of the bank in the said quarter stood at Rs 68,436.06 crore, up from Rs 57,720.07 crore in Q4 2017.
In a financial statement to the stock exchange, the bank has said that it expects bulk of the 12 companies in the Reserve Bank of India’s (RBI) first list of firms facing bankruptcy proceedings in National Company Law Tribunal (NCLT) to undergo resolution by the first half of this fiscal year.
Overall provisioning and contingencies were raised to Rs 28,096 crore for the fourth quarter compared to Rs 11,740 crore in the year-ago period.
The bank also experienced decline in its operating profit, net interest income during the quarter. However, its non-interest income has improved.
SBI said recovery in written-off accounts registered a robust growth of 21.18 per cent in March quarter.
Citing RBI’s circular of April 2017, SBI said the banks are required to make provisions at a higher rates in respect of advances to stressed sectors of the economy.
Besides, in cases of NCLT accounts the provisioning requirements is reduced from 50 per cent of secured portion to 40 per cent of secured portion as on March 31, 2018.

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