Mumbai: State Bank of India on Friday reported a 24% sequential rise in fourth quarter net profit on higher interest income and lower provisioning for bad debts.
Net profit for the quarter was at Rs4050.27 crore as against Rs3263.04 crore in September quarter. On profit parameters, the year ago quarter shoud not be compared as last year the bank had set aside heavy amounts, more than Rs7500 crore from its profits and reserves towards employee pension cost, making the Q4 2011 profit falling to only Rs20.88 crore.
However, on other parameters where the quarter on quarter results could be compared, the bank’s asset quality, the biggest worry for the analysts, worsened.
The bank’s gross non performing assets, or the share of bad debts as a percentage of total advances, increased to 4.44% from 3.28% in the year ago quarter. Post provisioning, the net NPA ratio was 1.82% as against 1.63%, the bank’s filing with the BSE showed.
Provisions for the quarter for bad debts, however, fell to Rs2836.84 crore as against 3263.91 crore.
The bank was expected to post a net profit of Rs 3,600 crore, according to Thomson Reuters I/B/E/S.
SBI, which has given loans to some of India’s most troubled borrowers including Kingfisher Airlines, said its net non-performing assets were at 1.82% of total loans at end of March compared with 1.63% a year earlier.
The lender was downgraded by Moody’s Investors Services in October because of its thin capital base and worsening asset quality.
Shares in SBI rose as much as 4%, recovering from earlier falls of as much as 1.5% in the morning, after posting better-than-expected earnings in the January-March quarter.
At 1:15pm, shares were trading up 3.6% at Rs 1,914.05.
Reuters contributed to the story