State Bank of India reported a 61.67 per cent decline in its net profit at Rs.1,115 crore during the quarter ended December 31, 2015, due to a substantial increase in bad loans.
The bank saw fresh slippages to the tune of Rs.20,062 crore during the quarter, of which about 70 per cent or Rs.14,722 crore are due to the accounts that were identified by the Reserve Bank of India in its asset quality review (AQR).
As a result, SBI’s gross NPA rose to a staggering Rs. 72,792 crore — which is an all-time high — representing 5.1 per cent of total loans.
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RBI, in its AQR, identified many accounts which banks were asked to classify as non-performing in the third and fourth quarters. Due to the fresh non-performing assets, provisioning for bad loans went up 59 per cent to Rs.7,645 crore of which close to 50 per cent was due to accounts identified in AQR, Arundhati Bhattacharya, chairman, SBI said at a press conference.
Loan growth picked up during the quarter and grew by 12.88 per cent year-on-year. At the end of July-September quarter, loan growth was less than 10 per cent.
The only silver lining was non-interest income which grew by 18 per cent to Rs. 6,178 crore, mainly driven by treasury operations. The bank booked a trading profit of Rs. 1,238 crore.
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Indian Bank reported 85 per cent fall in its net profit at Rs.42.3 crore when compared with Rs.277.5 crore in the year-ago period due to higher provisioning for bad loans amid sequential increase in operating profit.
The December quarter saw fresh slippages of Rs.1,739 crore of which Rs.400 crore came from small ticket loans, education and SMEs, while the rest was accounted by big ticket loans in the core sector like steel.
Provisions and contingencies for the December quarter stood at Rs.718 crore as against Rs.370 crore in the year-ago period.
For the 3rd quarter ended December 31, 2015, Indian Bank’s net interest income stood at Rs.1111 crore as against Rs.1105 crore in a year-ago period.
Other income saw a rise of 23 per cent at Rs.439 crore when compared with Rs.358 crore. Operating profit of the bank was lower at Rs.761 crore as against Rs.795 crore in Q3 of previous fiscal. However, it was higher when compared with preceding quarter’s operating profit of Rs.736 crore.
Despite slow credit off take, stress on asset quality, we were able improve operating profit on a sequential basis. While core sectors like steel, cement are still under stress, we see pick up in activity across FMCG, automobiles, renewable energy and some new road projects. Slippages may continue for the next couple of quarters due to sluggishness in the core sectors,” said Mahesh Kumar Jain, Managing Director & CEO of Indian Bank.
Its gross NPA moved up to 5.61 per cent during Q3 of this fiscal from 4.52 per in the year-ago period, while net NPA rose to 3.17 percent from 2.74 percent.
City Union BankCity Union Bank reported 10 per cent rise in its net profit at Rs.113 crore for the quarter ended December 31, 2015 as against Rs.103 crore in a year-ago period, on the strong increase in operating profit.
Its operating profit grew by 23 per cent at Rs.207 crore when compared with Rs.168 crore in Q3 of previous fiscal. Its net interest income also witnessed a robust increase of 21 per cent Rs.253 crore as against Rs.210 crore.
Its gross and net NPAs stood at 2.37 per cent (2.12 per cent in Q3 of previous fiscal) and 1.49 per cent (1.31 per cent) respectively.
Advances grew by 14 per cent to Rs.19,374 (Rs.16,968 crore).
“Given the challenging economic scenario, the bank has reported satisfying performance on all parameters. Less exposure to core sectors has helped us to protect our asset quality. SME, agriculture and trading categories account for 70-75 per cent of loan book. We expect the business and profitability growth to be better in the coming quarters,” said N Kamakoti, Managing Director and CEO of City Union Bank.
United BankUnited Bank of India closed the third quarter with a 59.3 per cent drop in net profit at Rs 17 crore against Rs 41.8 crore a year ago.
The bank attributed this to reduced interest income and lower trading profit according to a statement. While the bank had reduced its base rate from 10.25 per cent to 9.65 per cent over the last year, its trading profit was reduced by Rs. 98 crore due to adverse fluctuation in bond yields. The bank’s business showed muted growth at Rs. 12,714 crore. While deposits grew by 7 per cent advances grew by 8 per cent. UBI’s provision against NPAs has risen from Rs.355.9 crore to Rs.393 crore at December end 2015, even as business growth was subdued at 7.5 per cent. Total deposits at Rs. 7,370 crore rose 7 per cent while advances at Rs. 5,344 crore were 8.2 per cent higher than a year ago.
Oriental BankOriental Bank of Commerce reported a net loss of Rs. 424.6 crore for the third quarter ended December 31, 2015, due to significant jump in bad loans. The bank had earned a net profit of Rs.19.56 crore in the year-ago period. Total income also declined to Rs.5,350.48 crore during the quarter from Rs.5,458.79 crore. The gross NPAs rose to 7.75 per cent from 5.43 per cent. Net NPAs went up to 4.99 per cent from 3.68 per cent. Total provisions, excluding for income tax, rose to Rs. 1,183.05 crore from Rs. 885.14 crore year-ago.