SBI shares fall over 3% on weak Q3 earnings

SBI shares fall over 3% on weak Q3 earnings

SBI shares fall over 3% on weak Q3 earnings

State Bank of India reported a weak quarter with net slippages spiking up to ₹26,780 crore (adversely impacted by divergence). As a result, the adjusted loss for FY17 stood at Rs 6,248 crore against the earlier reported loss of Rs 1,558 crore.

R Subramaniakumar, Managing Director & CEO, Indian Overseas Bank attributed the loss mainly due to high provisions for non-performing assets (NPAs).

"Bank has kept the consistency of giving good results particularly quarter on quarter basis".

In all, it has to make Rs 394.13 crore of additional provisioning, of which Rs 262.75 crore is to be provided for during 2017-18.

BOI's net interest income (NII) saw decline of 12.62% to Rs 2,501.23 crore in Q3FY18, as against Rs 2,862.61 crore a year ago the same period.

Responding to a query, Kharat said, the bank was hoping that the issue of mark to market depreciation on investments would be a one quarter issue only and the bank has to adopt a wait and watch approach on it.

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Asset quality of the bank worsened with gross NPAs hitting 20.10% (Rs13,720.69 crore) of the gross advances as on 31 December 2017 against 15.98% (Rs10,845.31 crore).

Net NPA of the bank came down to 3.30 per cent as of net advances as on December 31, 2017 from 4.76 per cent registered during same period of past year.

The Kolkata-headquartered United Bank of India said it has provided Rs 167.44 crore for bad loans under insolvency process during this quarter against seven accounts. The management has guided for 10 per cent credit growth for FY19.

We cut our FY18E/19E/20E earnings by 75 per cent/20 per cent/22 per cent respectively and build in capital infusion of ₹8,800 crore as announced by the government.

"The advance portfolio has expanded by about Rs 384 crore mainly due to growth in MSME advance by 17.70 per cent and growth in housing loan and vehicle loan segment by 23.63 per cent and 31.31 per cent, respectively".

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