SBI's Q2-FY'14 net profit falls 35% to Rs2,375 crore
13 November 2013
State Bank of India, the country's largest lender, reported a 35 per cent year-on-year decline in its net profit for the second quarter of the current financial year, weighed down by bad loans and a slump in treasury operations.
SBI reported a net profit of Rs2,375 crore for the July-September quarter of the 2013-14 financial year, against a net profit of Rs3,658 crore during the corresponding quarter of the previous financial year.
SBI said the steepest drop in profits in more than two years has been due to worsening asset quality and a slump in its treasury operations. Net non-performing loans of SBI, as a percentage of total assets, worsened to 2.91 per cent during the quarter from 2.83 per cent in the preceding quarter.
SBI, which accounts for a quarter of the country`s loans and deposits, said its net interest income, or the difference in interest earned and paid out, however, rose 11.6 per cent to Rs12,251 crore.
The bank has set aside Rs2,645 crore during the July-September 2013-14 quarter to cover potential bad loans against Rs1,837 crore set aside in the same period last year -- a 44 per cent increase year-on-year.
State-run banks in India generally have a higher exposure to infrastructure industries which have long gestation period such as power, roads etc and the current economic slowdown has hit them most.