State Bank of India (SBI) said the Reserve Bank of India has found that it has under-reported bad loans by Rs 11,932 crore in the year ended 31 March 2019.
The divergence is the difference in bad loans reported by the bank and the assessment done by RBI. SBI had reported a net profit of Rs 862 crore in the year ended March 2019. The adjusted (notional) net loss for the year ended 31 March 2019, after taking into account the divergence in provisioning, was at Rs 6968 crore.
According to recent guidelines by the Securities and Exchange Board of India (Sebi), banks are now required to disclose divergence in the asset classification and provisioning immediately upon receipt of RBI's final Risk Assessment Report (RAR).
For the year ended March 2019, the gross non-performing assets (NPAs) assessed by RBI was at Rs 1,84,682 crore compared with Rs 1,72,750 crore in gross NPA reported by the bank.
The bank had reported Rs 65,895 crore net NPAs during the year while the RBI assessed it at Rs 77,827 crore, leaving a gap of Rs 11,932 crore. The divergence in provisioning also increased by Rs 12,036 crore for the fiscal ended March 2019.
Shares of SBI were up 1.4% at Rs 321.60 on BSE. The stock rose 15.73% in last three months as compared to a 13.71% rise in Nifty Bank index.
On standalone basis, the bank's net profit rose 218.75% to Rs 3011.73 crore on a 9.37% increase in total income to Rs 72,850.78 crore in Q2 September 2019 over Q2 September 2018.
The ratio of gross NPAs to gross advances stood at 7.19% as on 30 September 2019 as against 7.53% as on 30 June 2019 and 9.95% as on 30 September 2018. The ratio of net NPAs to net advances stood at 2.79% as on 30 September 2019 as against 3.07% as on 30 June 2019 and 4.84% as on 30 September 2018.
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