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SBI swings to Q2 profit, shows improvement in bad loans

Reuters 

- (SBI), the nation's biggest lender by assets, reported a second-quarter profit compared with a loss year ago, and a sequential improvement in its bad-loan ratio, sending its higher.

Net profit came in at 15.82 billion rupees ($243.25 million) for the quarter ended Sept 30, lower than analysts' estimates 26.96 billion rupees, but compared with a net loss 5.57 billion rupees a year earlier.

India, the market's sixth-biggest lender by assets, reported a 41 percent jump in second-quarter net profit on Friday, handily beating analysts' estimates, as its bad loan ratio also narrowed.

SBI, which accounts for more than a fifth India's banking assets, said gross bad loans as a percentage total loans fell to 9.83 percent at the end September from 9.97 percent three months earlier. (http://bit.ly/2maqlQq)

The drop came after the bank's bad loans had climbed since merged its five subsidiary with itself earlier in the year. The year-ago numbers have also been restated after the merger.

Its second-quarter profit was also helped by a stake sale in Life Insurance, which listed last month.

Net interest income rose nearly 3 percent from a year earlier to 185.86 billion rupees while total provisions including for bad loans rose almost 27 percent to 184.18 billion rupees, the lender, majority owned by the Indian government, said on Friday.

State-run lenders accounted for the bulk Indian banks' record 9.5 trillion-rupee soured loan pile as June. The surge in bad loans has choked new lending in an economy which needs revival in investment to help spur growth.

Chairman Rajnish Kumar, who was named to his position just last month, has said tackling bad loans would be a key priority, although the will not shy away from growth opportunities.

were up 4.3 percent at 0749 GMT in a Mumbai market that was down 0.08 percent. The stock is the second-best performer among the constituents the NSE Nifty main market index, having gained about 22 percent in the past one month to Thursday.

($1 = 65.0350 Indian rupees)

(Reporting by Samantha Kareen Nair in Bengaluru; Editing by Muralikumar Anantharaman)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, November 10 2017. 14:03 IST
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