SBI fourth quarter FY’14 net down 8% at Rs3,041 crore

State Bank of India (SBI), the nation's top lender has reported an 8 per cent decline in its fiscal fourth quarter net profit at Rs3,041 crore, run down by a 48 per cent year-on-year increase in provisioning for bad loans.

For the January-March quarter of the 2013-14 financial year, SBI reported a net profit of Rs3,299 crore on a standalone basis as profits continued to decline for the fifth consecutive quarter.

Total income of the state-run lender, however, increased to Rs42,443 crore in the fourth quarter of 2013-14, from Rs36,331 crore in the year ago period, SBI said in a statement.

Net interest income of the bank was also higher by 16.4 per cent at Rs12,903 crore, against Rs11,591 crore in the fourth quarter of the previous fiscal.

Provision for bad loans increased significantly in Q4 to Rs5,884 crore up 48 per cent from Rs3,974 crore in the year-ago period.

The gross non-performing assets (NPAs) as a percentage of total loan rose to 4.95 per cent during the quarter, from 4.75 per cent in the year ago period.

Net NPA also increased to 2.57 per cent compared to 2.10 per cent in the March 2013 quarter. SBI, however, said its asset quality improved, sending its stock more than 5 per cent higher.

SBI claims it has managed to bring down bad loans, with its net non-performing loans coming down to 2.57 per cent of total assets in the March quarter from 3.24 per cent in the preceding quarter, although still higher than 2.10 per cent in the year-ago quarter.

The declining earnings of most banks in India could be attributed to a continued slowdown of the economy, the worst since the 1980s, which has resulted in an increase in bad loans.

Investors are pinning hop on the new government led by Narendra Modi to speed up clearance to big-ticket projects and boost investment to take the economy back to the high-growth path.