SBI posts Rs2416 cr loss in Q3, bank chief not optimistic on next quarter

Mumbai: SBI third quarter of current fiscal ended with a net loss of Rs2,416 crore, the first quarterly loss of the bank since 1999, and  chairman Rajnish Kumar, who took over in October, hints that it will be in the red in the fourth quarter too, ending March.  The largest lender by assets in the country reported a net profit of Rs1582 crore in the previous quarter.

Kumar said that the higher provisions made for covering bad loans, loss suffered in its bond portfolio and for the next round of employees wage hike has splashed red on the profit-loss accounts of the bank for the third quarter.

In a post-results teleconference, the chairman said “I don’t want to sound very optimistic on the fourth quarter (March), and neither very pessimistic. The bank is working on a strategy to capture growth opportunities.’’

Referring further on the future performance of the bank, Kumar said “ 2019 onwards, we have certain estimates and plans to achieve a certain level of return on assets. That is what is on our horizon. Today I am sitting in February, in 45 days no miracle will happen. But we can hope for much better performance in the next (fiscal).’’

He said that the bank made a loan loss provision of Rs17,760 crore during the quarter, as compared with Rs9,662 crore a year ago. According to him, NPA recognition has peaked and is not expected to rise here on.

In addition to provisions related to non-performing assets, the bank kept aside Rs3,400 crore as mark-to-market provision on account of rising bond yields. It has made a Rs700 crore provision for the next round of employee wage hike. The previous wage revision agreement for employees of the state-run bank expired on October 31.

 

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