New Delhi: Faced with huge NPAs, SBI Chairman Arundhati Bhattacharya on Tuesday said bad loans are expected to surge in the coming quarter, which may hit its profitability.


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"We had already said at our press conference during the quarterly (third) results press conference. I will say the same thing, that our profits were impacted due to rise in non-performing assets (NPAs)," Bhattacharya told reporters on the sidelines of the opening of the bank's Japan desk from here.


"In the next quarter too, NPAs will rise further that will affect our profits."


SBI's gross NPAs, or bad loans, soared to Rs 72,791.73 crore at the end of the December quarter as against Rs 61,991.45 crore a year earlier.


The mounting pressure due to bad loans hit profitability of SBI as its consolidated profit plunged 67 percent to Rs 1,259.49 crore for the quarter on account of higher provisioning for bad loans.


Reeling under stressed assets, state-owned banks' third quarter performance can at best be described as dismal, with Bank of Baroda reporting a loss of over Rs 3,342 crore, the highest from any bank so far.


A total of 27 public sector banks have written off a staggering Rs 1.14 lakh crore for bad loans in 2012-15, with the last fiscal alone witnessing a steep 53 per cent rise in write-offs as part of the balance-sheet clean-up.


The intention of the opening up of the Japan desk, Bhattacharya said, is to facilitate Japanese investors who are keen to put money in India.


"We will inform them about their regulatory requirements, their tax requirement etc. Our Japan desk will try and provide the kind of information which Japanese investors and entrepreneurs should know in order to come to this country," she said.


The SBI chairman also said there are many Japanese who want to set up joint ventures and often face difficulty in choosing a right partner to suit their requirements.


On the other side of the spectrum, there are many Indians who want to bring some capital from Japan as well as source technical expertise from there, she said.


"So in that manner, the Indians too are not aware whom to approach. So we will try to bridge that link through our Japan desk," she reasoned.


Going forward, SBI will open another Japan desk from Chennai. There has been an increase in the Japanese community in Chennai, she said.


"Second, we have also got request from Korea that such a desk should be opened for them. So, we are considering that. If there is a requirement for any other country as well, we will definitely look at it," she added.