Affected badly by higher provisions for bad loans and fall in interest income, banking behemoth SBI on Thursday reported 18.5 per cent decline in profit to Rs3,299 crore for January-March period, its first quarterly fall in two years.
Reacting to the below expected numbers, shares tanked 8.87 per cent on BSE, wiping off Rs12,867 crore from its market value.
“The fall in growth of net profit had been due to higher provisioning for sub-standard and doubtful assets for which provision-coverage ratio (PCR) had been increased in the last quarter of FY'13,” SBI Chairman Pratip Chaudhuri told reporters after declaring the annual results in Kolkata.
loan provisioning in Q4 was Rs3,974 crore, he said. The SBI chief said NPAs in the agriculture sector posed a challenge as also mid-corporate and SME sectors.
About the future outlook, he said that there would be a marginal increase in corporate loans and capital expenditure.”There will not be much improvement in these areas. Coupled with this, there will also be a contraction in demand due to high interest rate regime followed by the monetary authority,” he said.