SBI reports first profit in four quarters: Key Q2 takeaways

NEW DELHI: State Bank of India on Monday reported its first profit in four quarters. The lender, however, posted 40 per cent year-on-year dip in profit at Rs 944.87 crore for the quarter ended September 30 against Rs 1,581.55 crore la st year.

An analyst poll at ET NOW had predicted a net loss of Rs 704 crore.

Strategy on controlling credit cost, containing overhead expenses and focus on credit quality has enabled the bank to deliver a net profit during the second quarter, SBI said in a statement.


Below are the key takeaways from SBI’s second quarter results:

Asset quality
The bank’s asset quality improved, with gross bad loans as a percentage of total loans came at 9.95 per cent at September-end compared with 10.69 percent in the previous quarter. The figure was still slightly higher than 9.83 percent in the year-ago period.

Updates on IL&FS
SBI’s MD and CEO Rajnish Kumar in a press briefing said that the bank has Rs 250 crore exposure to the IL&FS group at the holding company level.

“The bank is exposed to 6 per cent of IL&FS equity,” Kumar said, adding that the lender has complete control on non-performing assets (NPAs). The bank has exposure to special purpose vehicles (SPVs) of IL&FS, he added.

Exposure to NBFCs
SBI’s NBFC exposure stands at Rs 1.5 lakh crore. This includes all housing finance companies. Kumar said that most NBFCs have been able to rollover commercial papers.

Provisions
Provisions and contingencies dipped 36.81 per cent to Rs 12,092.17 crore against Rs 19,137.43 crore last year.

Slippages
Slippages stood at Rs 10,888 crore in Q2FY19 over Rs 14,349 crore in Q1FY19 and Rs 32,821 crore in Q4FY18.