Kolkata: Country's biggest bank SBI on Friday reported a 23 percent rise in net profit at Rs 3,742.02 crore for the fourth quarter ended March 2015 and said it would focus on bad loan recovery in the current fiscal to rev up its balance sheet.
State Bank of India (SBI) had made a net profit of Rs 3,040.74 crore during the same quarter a year ago.
Total income of the bank for the quarter under review increased to Rs 48,616.41 crore from Rs 42,443.27 crore in the same period a year ago, SBI Chairperson Arundhati Bhattacharya said while announcing the quarterly numbers here.
The bank has recommended a dividend of 350 per cent or Rs 3.50 per share for the year ended March 2015.
For the entire fiscal ended March 2015, SBI's net profit increased 20 percent to Rs 13,101.57 crore as compared to Rs 10,891.17 crore for the year ended March 2014.
SBI Group's consolidated net profit rose 20 percent to Rs 16,994.30 crore during the fiscal under review as compared to Rs 14,173.77 crore in the previous fiscal.
Bhattacharya said: "We are now intending to clean up the balance sheet and pursue recoveries ...."
In the last year, she said, "we had pursued a two-pronged strategy of consolidating the existing businesses and exploring new ones."
The bank's asset quality improved in the period under study as net non-performing assets (NPAs) or bad loans were trimmed to 2.12 percent of net advances as against 2.57 percent at the end of previous fiscal.
At the same time, gross NPAs also came down to 4.25 per cent of gross advances, from 4.95 percent at the end of March 2014.
Bhattacharya said the bank's gross NPA at the end of March, 2015 stood at Rs 56,725 crore as compared to Rs 61,605 crore in the previous corresponding period.
Shares of SBI ended with a loss of nearly 3 percent on BSE.
"Both the Gross NPA and Net NPA levels are declining and the stress is lessening," Bhattacharya said.
As a result, provisions against bad loans came down to Rs Rs 4,635.43 crore during the quarter as compared to Rs 5,883.75 crore in the same period a year ago.
Fresh slippages during the fourth quarter of 2014-15 were Rs 4,769 crore, lower than Rs 7,947 crore of the same period of the previous fiscal.
She said that many of the accounts were sought to be restructured as the companies did not want them to turn NPAs and wanted some breathing space till the time the economy recovers, which was expected to be so in another two or three quarters.
The amount of restructured assets in the pipeline was Rs 2,625 crore and a total of 71,229 accounts had been restructured by bank during the last fiscal.
SBI expressed concern on certain sectors like construction, power and iron & steel.
"Our effort will be to make the system more risk-mitigated and robust," Bhattacharya said.
She said that the bank had also obtained the permission from the RBI to amortise the write-downs of bad assets which are sold to ARCs over a several quarters.
This, she said, would not adversely hit the earnings of the bank in a single quarter.
On the new initiatives, she said the bank started on a digital journey and that it had already tied up with majors like Amazon, Snapdeal and PayPal.
"More and more of these are in the offing," she added.
SBI's net interest margin (NIM) stood at 3.16 percent at the end March 2015.
"We expect that the NIM to remain stable (in the current fiscal)," she said.
Operating profit of the bank during the fourth quarter increased 16.76 percent at Rs 12,409 crore as compared to Rs 10,628 crore in the previous similar period.
Deposits and advances of the bank during the quarter stood at Rs 15,76,793 crore and Rs 13,25,424 crore respectively.
On capital raising, Bhattacharya said that the bank had got the approval to mobilise Rs 15,000 crore within a span of 10 months.
Depending on the market conditions, the bank would raise funds. Regarding SBI Life, she said valuations were being done at the moment. Divesting of SBI stake in SBI Life would happen but when difficult to say, she said.
The board of SBI has already given approval for dilution of 10 percent stake in SBI Life recently.
SBI has 74 percent stake in SBI Life Insurance, while the foreign partner BNP Paribas Cardif of France holds the rest.