SBI Q4 Net dips 18.5% on higher provisioning; shares tank 8%
Kolkata: Hit by higher provisions for bad loans and fall in interest income, banking behemoth SBI today reported 18.5 percent decline in profit to Rs 3,299 crore for January-March period, its first quarterly fall in two years.
Reacting to the below expected numbers, shares tanked 8.87 percent on BSE, wiping off Rs 12,867 crore from its market value.
"The fall in growth of net profit had been due to higher provisioning for sub-standard and doubtful assets for which provision-coverage ratio (PCR) had been increased in the last quarter of FY'13," SBI Chairman Pratip Chaudhuri told reporters after declaring the annual results here on Thursday.
Loan provisioning in Q4 was Rs 3,974 crore, he said.
The SBI chief said NPAs in the agriculture sector posed a challenge as also mid-corporate and SME sectors.
About the future outlook, he said that there would be a marginal increase in corporate loans and capital expenditure.
"There will not be much improvement in these areas. Coupled with this, there will also be a contraction in demand due to high interest rate regime followed by the monetary authority," he said.
Net interest margin (NIM) of the bank as on March 2013 stood at 3.34 percent (3.85 percent). NIM guidance for the bank for the current fiscal was 3.60 percent, he said.
The gross NPA as a percentage of total loans rose to 4.75 percent during the quarter, from 4.44 percent in the year ago period.
Commenting on SBI numbers, Motilal Oswal Securities VP (Equities) Gautam Sinha Roy said net profit declined 19 percent which was "below estimates". "Provisions came in at Rs 4,180 crore which were above estimate of Rs 2,750 crore," he added.
Commenting on the results, Angel Broking VP (Research- Banking) Vaibhav Agrawal said SBI announced "moderate set of numbers" for the quarter. "While NII declined by 5 percent yoy, non-interest income grew at modest 5 percent yoy."
The standalone total income of the state-run bank rose to Rs 36,331 crore in Q4, from Rs 33,959 crore in the same period a year ago, a SBI statement said.
The net interest income (NII) declined 4.42 percent to Rs 11,591 crore during the fourth quarter of FY13.
The standalone profit of the state-run bank for 2012-13 stood at Rs 14,105 crore, making it the third highest profit making firm in the country after ONGC and Reliance Industries.
"SBI's consolidated profit are so far the second highest among the companies that have declared the results because we are about Rs 3,000 crore less than Reliance Industries. ...So we have consolidated our position as the third highest profit making company in the country," Chaudhuri said.
Standalone total income of the bank in 2012-13 increased to Rs 1,35,691.94 crore, from Rs 1,20,872.90 crore in FY12.
The consolidated net profit of the bank and its five associates stood at Rs 17,916 crore in 2012-13.
The NII rose 2.40 percent to Rs 44,331 crore for 2012-13 fiscal. Total provisioning of the bank stood at Rs 16,977 crore at the end of 2012-13 fiscal, against Rs 19,866 crore in 2011-12 fiscal.
Chaudhuri said to improve its asset quality SBI would discourage below investment-grade accounts.
He also said the bank would invest in quality stocks with good volumes.
Deposits of the bank as on March 31, 2013, stood at Rs 12.02 lakh crore and advances at Rs 10.78 lakh crore. Chaudhuri said the bank's market in deposits as on March 2013 stood at 16.46 percent and advances at 16.66 percent.
About raising fresh capital, he said the issue would be discussed in the second quarter of the present fiscal.
The bank declared a dividend of Rs 41.50 per share, for the year ended March 31, 2013.