India’s largest bank posts record quarterly profit

Bloomberg

State Bank of India (SBI) posted a record quarterly profit that beat estimates, helped by higher interest and other income as well as lower provisions for bad loans.
However, India’s largest lender broke with trend and didn’t offer guidance on fresh soured assets — the so-called slippage ratio — citing uncertainty arising from the coronavirus outbreak that is ravaging the country.
“It is a very fragile situation and too early to predict,” Chairman Dinesh Khara said on a briefing call. SBI is aiming to boost the pace of credit growth to 10% in the year through March 2022 from 5.7% the previous year, but won’t “compromise” on asset quality, he said.
The lender, which controls a fifth of the nation’s loan market, is a key barometer for the financial health of India’s economy that’s reeling from a second deadly wave of coronavirus infections. The asset quality of lenders could come under pressure after restrictions over the classification of bad loans were removed and the pandemic hurts businesses and jobs.
Net income was 64.5 billion rupees ($880 million) in the three months ended March, compared with 35.8 billion rupees a year earlier, it said in a statement. That beat the 61.7 billion rupee average estimate in a Bloomberg survey of 10 analysts.
SBI’s gross bad loan ratio was 4.98% at the end of March, compared with 5.44% three months earlier. The bank set aside 110.5 billion rupees in provisions in the fourth quarter, down from 135 billion rupees a year ago and 103.4 billion rupees in the December quarter.