SBI incurs $709mn loss in 3 months
August 10 2018 11:18 PM
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The State bank of India office building in Kolkata, India. The bank posted a third straight quarterly loss as it set aside provisions against bad loans and losses on its holdings of government bonds.

Bloomberg/Mumbai

State Bank of India, the country’s largest lender by assets, posted a third straight quarterly loss as it set aside provisions against bad loans and losses on its holdings of government bonds.
SBI had a loss of Rs48.8bn ($709mn) in the three months ended June 30 compared with a Rs20bn profit a year earlier, the Mumbai-based lender said in an exchange filing yesterday.
Its shares fell 4.1%, most in six months, at the close of trading in Mumbai.
SBI chairman Rajnish Kumar had predicted in May that the bank’s earnings would start to improve in the current fiscal year as a result of better loan recoveries under India’s revamped bankruptcy law.
Provisions for bad debt caused the bank to record a loss of Rs65bn in the year ended March 31.
“People don’t believe when you say that the worst is over,” Kumar said in a call with reporters on Friday after the earnings announcement. “We have to prove now that the worst is over. So wait for next two-three quarters.” The Mumbai-based lender set aside Rs59bn to cover mark-to-market losses arising from rising Indian government bond yields.
SBI could have made use of a provision offered by the banking regulator to spread out the treasury losses over several quarters, the exchange filing showed.
Provisions for bad debt rose 8% to Rs130bn from a year earlier, but SBI’s gross bad loans as a percentage of total lending narrowed to 10.7% from 10.9% in the previous quarter.





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