SBI logs 4% rise in Q3 net to Rs 3,396 cr as bad loans weigh
The bank’s asset quality deteriorated with both gross and net non-performing assets (NPAs) rising sequentially. While gross NPAs rose 15 basis points (bps) to 5.3%, net NPAs also rose 15 bps to 2.59%. The bank saw fresh slippages to the tune of R8,165 crore and made loan loss provisions of R2,766 crore. It has a loan restructuring pipeline of R3,700 crore for the quarter ending March 31.
Chairman Pratip Chaudhuri attributed the rise in NPAs to the economic slowdown, high interest rates and payments due from the government to contractors. Chaudhuri said the situation would improve in the January-March quarter as payments from government projects are expected to be cleared, improving the cash flows of contractors. Also, with a large number of mines being allowed to open, iron ore linkages to steel companies would improve, he added.
SBI’s net interest margins remained under pressure as it contracted sequentially from 3.77% to 3.72%. The yield on advances declined from 10.93% in December 2011 to 10.75% in December 2012, while the cost of deposits rose from 5.9%