SBI posts Rs838-cr Q4 net profit despite higher bad loan provisioning

State Bank of India, the country’s top lender, has posted a net profit of Rs838.40 crore for the fiscal fourth quarter ended 31 March 2019 despite making hefty provisions for bad loans. SBI had reported a net loss of Rs7,718 crore in the corresponding quarter of the previous fiscal.

The state-run lender saw is bad loans surge 24 per cent to Rs17,335.84 crore in the January-March quarter from Rs13,970.82 crore in the previous quarter (October-December 2018).
Provision coverage ratio, the amount set aside to cover non-performing assets, stood at 78.73 per cent against 66 per cent during the similar quarter last fiscal.
SBI said it has made 90 per cent provision for major loans coming under the purview of the National Company Law Tribunal (NCLT) as a precautionary measure.
“For three major accounts — Essar Steel, Bhushan Power and Steel and Alok Industries — that are in very advanced stages of restoration, we have made 100 per cent provision. As a result, almost Rs16,000 crore is what is recoverable as soon as the judicial process is over. This shows the strength of our balance sheet," said Rajnish Kumar, chairman, SBI.
The bank’s asset quality improved during the quarter with additions of bad loans falling sharply. 
SB said it classified its exposure worth Rs1,125 crore out of Rs3,487 crore towards Infrastructure Leasing and Financial Services (IL&FS) as a non-performing asset (NPA) in this quarter.
The lender said it also made 50 per cent provisioning on all the holding companies. It classified a Rs1,200 crore exposure to Jet Airways as an NPA.
As a percentage of total loans, gross NPAs stood at 7.53 per cent, compared with 8.71 per cent in the previous three months, and 10.91 per cent in the year-ago quarter.
Net NPAs were at 3.01 per cent in the March quarter against 3.95 per cent in the previous quarter, and 5.73 per cent in the corresponding quarter of the previous year.
Kumar expects the bank’s provisioning woes to end by March 2020 and SBI will clear all bad loans emerging from corporate loans.
SBI reported a 15 per cent year-on-year increase in its net interest income (NII), or the difference between interest earned on loans and paid on deposits to Rs22,953.83 crore in the three months ended 31 March from Rs19,974.28 crore in the year-ago quarter. 
Non-interest income was lower at Rs12,494.78 crore during the period against Rs12,685.12 crore in the previous year quarter.
Deposits rose 7.58 per cent to Rs29,11,000 crore, while advances increased 13 per cent to Rs21,86,000 crore.
The bank said that it is looking to list two of its subsidiaries–SBI Card and SBI General–in the current fiscal.