State Bank of India (SBI), on Friday, reported a 34.21 per cent fall in its net profit at Rs.2,234 crore for the third quarter ended December 31, 2013, against Rs.3,396 crore in the year ago period.
SBI said that staff expenses increased from Rs.4,351 crore to Rs.5,867 crore, a year-on-year growth of 34.84 per cent “due to higher provisions for salary and pension”.
Further, net NPA increased to 3.24 per cent at end-December 2013 from 2.59 per cent at end-December 2012.
The fresh slippage in the third quarter was to the tune of Rs.11,000 crore, including the slippage reported by mid-corporates and small and medium enterprises at Rs.9,500 crore.
“The slippages are mainly in the areas of mid-corporate group and small and medium enterprises,” said Arundhati Bhattacharya, Chairperson, while addressing a press conference here.
According to her, "large corporates have much more staying power, they have alternative means of financing, they have robust balance sheets, they have cash flows from other diverse areas of business, they are able to withstand a downturn."
“In the case of mid-corporates and the SMEs, these accounts have grown large, they have added a lot of capacity but they do not have diversification in business to allow them to withstand downturns, they do not have the access to funding which large corporates have and they do not have deep pockets to continue for a very long time,” she added.
Ms. Bhattacharya also said that in respect of mid-corporates and SMEs, ``we need to do a lot of work around. SBI, as a banker, has always been a banker through hard as well as fair times. To that extent, we will have to continue to support our customers where they deserve it, but obviously not for those who don’t.”
“I really do believe that we still have pain left. I cannot say that this is at an end,” said Ms. Bhattacharya. To see the stress reducing, according to her, it needs at least two quarters after a GDP turnaround. “With the GDP going nowhere, with the IIP actually tanking, it is very difficult for us to see an end to this stress.”
Net interest income increased from Rs.11,176 crore in the third quarter of previous fiscal to Rs.12,641 crore in the third quarter of this financial year, a growth of 13.10 per cent.
Deposits of the bank increased from Rs.12,02,740 crore to Rs.13,49,940 crore and Savings Bank deposits from Rs.4,14,907 crore in March 2013 to Rs.4,65,833 crore in December 2013.