SBI reports biggest ever quarterly profit

Bloomberg

State Bank of India (SBI) posted its biggest ever quarterly profit as it wrote back provisions on bad loans and recoveries improved.
Net income rose to 55.8 billion rupees ($782 million) in the three months ended in December from 39.6 billion rupees a year earlier. That’s broadly in line with the 58.7 billion rupee average of analysts’ estimates compiled by Bloomberg.
SBI has been helped by the resolution of some large bad loan accounts, such as Essar Steel India Ltd, allowing the bank to write back provisions. The lender also expects to rein in fresh bad debt in the current quarter.
However, future profit may be constrained as India’s slowing economy hurts demand for new credit, Chairman Rajnish Kumar said in a briefing in Mumbai.
While some 135.5 billion rupees of bad loans were recovered or upgraded in the December quarter — versus 39.3 billion in September — about 165 billion rupees of debt slipped into the soured credit pile. This was mainly due to an unnamed mortgage company, SBI said. Slippages in the current quarter are expected to be capped at 60 billion rupees.
“Going forward, there is no big-ticket loan in sight which is likely to slip,” Kumar said.
However, credit growth was muted at 6.8% and Kumar said it’s difficult to achieve the 10% target. “My wishlist is to get better on corporate credit growth,” Kumar said. “When selflessly you pray to God, your prayers get answered.”