Country’s largest bank SBI on Friday reported a steep 34 per cent fall in net profit to Rs 2,234 crore for the October-December period of 2013-14 due to rising asset quality stress, investment losses and hefty provisioning for pensions, and warned of “more pain” coming in.
Painting a grim picture of an elongated period of stress, State Bank of India (SBI) Chairperson Arundhati Bhattacharya said bulk of the stress on assets came from mid-corporate and SME segment. “We need at least a couple of quarters of uptick in GDP for the asset quality to be better. I see more pain coming in,” she said
The bank has decided to move the stress assets recovery branches that were reporting in the National Banking Group so as to have better focus and outcomes, she said. “With that in mind we have now changed the structure and created four general managers- north, south, east, west, who will be reporting into the stress management group and will actually be owning these stress asset recovery branches in the circles,” Bhattacharya said. The bank’s gross NPA ratio deteriorated to 5.73 per cent as against 5.30 per cent in the year-ago period, while provisions towards loan losses rose to Rs 3,428.59 crore from Rs 2,766 crore a year ago.