SBI Q3 earnings today: 4 things to watch out for

SBI Q3 earnings today: 4 things to watch out for

SBI Q3 earnings today: 4 things to watch out for

State Bank of India, India's largest lender, posted a "disappointing" set of numbers for the December quarter on Friday, running a loss of Rs 1,886.57 crore on massive under-reporting in dud assets found by RBI and reverses in treasury operations.

The bank's net profit fell to Rs 112 crore in the quarter ended December, compared with Rs 25,300 crore in the year-ago quarter.

Provisions: Credit costs or the percentage of provisioning against total advances is expected to rise because of fresh loan slippages and the bank's strategy to shore up provision coverage ratio.

Among other parameters, the net interest margin improved to 2.72 per cent during the quarter from 2.31 per cent in the year-ago quarter. Higher provisions for stressed assets ate into the bank's bottomline even as interest income of the bank remained low. It lower than CNBC-TV18 estimates of Rs 282.6 crore.

During the quarter, the central government has infused Rs 1,375 crore by way of preferential allotment of equity shares.

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Bad loans at Indian banks have almost doubled in the past four years as an economic slowdown took its toll on the ability of companies to repay debt, exacerbated in the case of some banks which analysts said had expanded lending too fast.

The bank feels economic revival is underway which has led it to up its loan growth target to 10.3 per cent in FY19 from the over 2 per cent achieved in the first nine months. The gross non-performing assets ratio jumped from 7.23 per cent to cross the double digits mark at 10.35 per cent during the quarter under review.

Other income (non-interest income) during the quarter declined 5.7 percent to Rs 1,673 crore while operating profit grew by 40.6 percent to Rs 3,650.11 crore compared to previous year, driven by interest and fee income.

The SBI scrip closed 1.68% down at Rs 296.40 a piece on the BSE as against a 1.18% correction in the benchmark.

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