The State Bank of India, the country’s largest bank, reported a net loss of Rs 7,718.17 crore on Tuesday for the quarter ended March 31, as bad loan provisions doubled compared to the same quarter last year, according to a press statement released by the bank. This was the biggest quarterly loss reported by the bank in its history, The Financial Express reported.
The bank had reported a net profit of Rs 2,814.82 crore during the fourth quarter of 2016-’17. A poll conducted by Thomson Reuters had estimated that the bank would report a loss of Rs 1,270.5 crore for the January-March 2018 quarter.
SBI’s loss is the second-largest quarterly loss reported across Indian lenders. Last week, Punjab National Bank had reported its largest ever loss of Rs 13,417 crore.
SBI’s bad loan provisions surged to Rs 28,096 crore during the March quarter, which is more than double the amount reported in the corresponding period last year. The rise in provisions was because the bank had to provide more for bad loans, the losses it incurred on trading, and for mark-to-market losses due to a rise in bond yields.
“Financial year 2017-’18 has been a difficult year for the entire industry and SBI is no exception,” said SBI Chairperson Rajnish Kumar, according to Bloomberg Quint. “The loss number may look big but look at the strength of the balance sheet.”
Another reason for the loss is that the Reserve Bank of India in February abolished schemes that allow for restructuring of bad loans. SBI’s gross bad loans as a percentage of total loans rose to 10.91% from 10.35% three months earlier, and 6.90% a year before, Tuesday’s press release said.
“We have put the past behind us even as the last three years have been challenging,” said Kumar, according to MoneyControl. “Today, what you see is a stronger State Bank of India than two years ago.”
Shares of SBI were trading 5.2% up at Rs 257.85 on the Bombay Stock Exchange in afternoon trade.