Registering its first profit growth in six quarters, country's largest bank SBI today posted 3.3 per cent rise in net profit at Rs 3,349.08 crore in the three months to June, notwithstanding a steep 72 per cent hike in provisioning for bad loans.
The bank had posted a standalone net profit of Rs 3,241.08 crore in the year-ago period.
On a consolidated basis, the bank's net profit increased 3.4 per cent to Rs 4,448.15 crore for the quarter ended June 30, against Rs 4,298.56 crore in the year-ago period.
Total income on a standalone basis increased to Rs 40,739.21 crore during the quarter, against Rs 36,192.62 crore in the year-ago period, the bank said in a BSE filing.
Provision for bad loans increased to Rs 3,903.41 crore as against Rs 2,265.83 crore a year earlier, registering an increase of 72 per cent.
The bank's gross non-performing assets (NPAs) declined to 4.90 per cent of total advances at the end of June, against 5.56 per cent a year-ago.
"Profitability pressures will continue if the economy doesn't pick up. We need the economy to move up to ensure profitability pressure comes down," SBI Chairperson Arundhati Bhattacharya said.
During the quarter, the net interest income increased 15.12 per cent to Rs 13,252 crore as against Rs 11,512 crore in the April-June period of last fiscal.
On a blended level (domestic and international put together), the net interest margin of SBI slightly fell to 3.13 per cent from 3.16 per cent on account of a dip in international margin which stood at 1.08 per cent, down from 1.49 per cent in June last year. However, the domestic NIM improved to 3.54 per cent from 3.44 per cent.
Bhattacharya said the drop in international margins is due to of non-utilisation of the USD 1.25 billion funds which it raised through medium term note issue in April.
On improved asset quality, Bhattacharya said, "Asset quality has a direct impact on profitability and if your asset quality improves it means good for profitability."
Shares of SBI today closed down by 0.9 per cent at Rs 2,415.25 apiece on the BSE.
Total NPAs in the agriculture portfolio stood Rs 1,224 crore in the period.
During Q1, fresh slippages stood at Rs 9,932 crore against Rs 13,766 crore in the year-ago period. The proposed farm loan waiver in Andhra Pradesh and Telangana had an impact on the bank's fresh