Lane applause for SBI despite dip in Q4 net
Lane applause for SBI despite dip in Q4 net
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tyle="text-align:justify">The State Bank of India stock shut at six per cent higher in spite of the nation’s largest lender exposure a 66 per cent drop in net profit to Rs 1,264 crore in the March quarter. Also, The scrip closed at Rs 195 on the BSE.

Ravi Shenoy, vice-president, Motilal Oswal Securities, said the bank had a watch list of only 1 per cent of loans and this brought relief to the markets.

SBI’s bottom line is under pressure over a sharp rise in provisions for bad loans. The provisions for non-performing assets (NPAs) grew to Rs 12,139 crore during the quarter from Rs 4,985 crore in the same quarter a year ago. Sequentially, too, it was up almost 59 per cent. The provision coverage ratio for bad loans stood at 60.69 per cent at the end of FY16, much lower than 65.23 per cent at the end of the December 2015 quarter.

SBI had posted a net profit of Rs 3,742 crore in January-March 2015. For 2015-16, its net profit was Rs 9,950 crore against a net profit of Rs 13,101 crore in 2014-15.

“I don’t see any extraordinary pressure on the NIM. However, this is a falling rate scenario and an  accommodative cycle,” said SBI Chairperson Arundhati Bhattacharya.

She added, If there is a rate cut, there is a pressure to bring down the interest rate. There could be some impact on the NIM.”

 

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