Despite spike in NPAs, SBI Q1 profit jumps to Rs 2,006 cr

The operating income of the bank fell by 5.17 per cent to Rs 25,612 crore during April-June quarter of 2017-18

The country's largest lender SBI reported over 5-fold jump in consolidated net profit to Rs 2,006 crore (Rs 20.06 billion) for the June quarter of the current fiscal even as non-performing assets (NPAs) or bad loans spiked sharply.

Posting first quarterly earnings after the merger with its five associate banks and Bharatiya Mahila Bank Ltd (BMBL), the state-owned bank said in a statement that its net profit in the April-June quarter of last fiscal, 2016-17, was Rs 374 crore.

It said the figures, ratios and other information are based on the merged audited numbers.

"Historical data has been arrived at by aggregating the audited numbers of the erstwhile associate banks, Bharatiya Mahila Bank and SBI for comparison purposes."

Asset quality of the bank slipped substantially because of higher accruals of bad loans from the books of associates, it added.

There were slippages with gross NPAs rising to 9.97 per cent of the gross advances as on June 30, 2017, from 7.40 per cent as at end-June 2016.

Net NPAs or bad loans too soared to 5.97 per cent of the net advances by June end of this fiscal, up from 4.36 per cent in the year-ago period.

"Gross NPAs increased from Rs 137,662 crore as on June 2016 to Rs 188,068 crore as on June 2017," SBI said.

The operating income of the bank fell by 5.17 per cent to Rs 25,612 crore during April-June quarter of 2017-18, as against Rs 27,007 crore in the same period a year ago.

Of the other key metrics, bank's fee income increased to Rs 4,870 crore during first quarter of 2017-18, up 16.21 per cent from Rs 4,190 crore in same period year ago.

However, net interest income decreased by 3.51 per cent to Rs 17,606 crore from Rs 18,246 crore year earlier.

Non-interest income also fell by 8.62 per cent to Rs 8,006 crore from Rs 8,761 crore.

State Bank of India (SBI) said it contained the increase in operating expenses at 3.72 per cent year-on-year.

On profitability front, SBI said there has been a fall of 8.4 per cent in interest income from advances during April-June of 2017-18 at Rs 36,142 crore from Rs 39,545 crore due to reduction on base rate/MCLR during the period.

Deposits of the bank, as on June 2017 rose by 13.28 per cent to Rs 26,02,534 crore from Rs 22,97,426 crore.

Also, gross advances were up 1.46 per cent from a year ago to Rs 18,86,666 crore by June-end 2017, as against Rs 18,59,513 crore as on June 2016.

SBI had merged its five associate banks -- State Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank of Travancore, State Bank of Hyderabad and State Bank of Patiala, besides the BMBL -- with itself from April 1.

On a non-comparable basis, SBI said, its consolidated net profit during April-June, 2017-18, stood at Rs 3,105.35 crore. It was at Rs 867.32 crore in the same period year ago.

Consolidated income (non-comparable) stood at Rs 70,776.56 crore in the first quarter of this fiscal. It was at Rs 69,414.82 crore year earlier.

The non-comparable standalone net profit in April-June of 2017-18 stood at Rs 2,005.53 crore. The net profit was at Rs 2,520.96 crore year ago.

Photograph: Danish Siddiqui/Reuters