SBI : Net Profit Drops By 39% In Q3FY14

State Bank of India (SBI), India’s largest lender has continued its bad performance in the third quarter financial year 2013-14. The company announced its Q3FY14 result, today during market hours, after which its stock price fell by 1.84 % and closed at Rs 1473.

Although, the company's consolidated Net Interest Income (NII) registered a good growth of 11.6 % (Rs 17196.81 crore) on yearly basis, its net profit collapsed by 39% which stands at Rs 2838.62 crore in the same period. The NII improved mainly due to the growth in income earned from its two major business segments (retail and corporate banking). Interest income from its retail and corporate business grew by 14 % (Rs 22713 crore) and 9% ( Rs 18585.92 crore) on yearly basis respectively. Its other businesses – treasury and insurance also showed improvement in the same period. The growth in other income of the company showed a good momentum during the quarter, adding Rs 10274.7 crore to the total income with a growth of 21 % on YoY basis.

However, due to higher rise in its operating expenses (employee and other operating expenses), operating income declined by 6 % and stood at Rs 9878.9 crore.

During the December quarter for current financial year, the bank has raised its provisions heavily due to which its net profit dropped sharply. This is the third continuous quarter when the bank has reported a drop.
 
The bank's asset quality has deteriorated on sequential basis. On absolute basis, gross and net Non-Performing Asset (NPA) of the bank has increased by 5.6 % (Rs 67799 crore) and 15.6 % (Rs 37167 crore) respectively. 

In terms of proportion of gross advances too, the quality of the bank's asset has fallen in October-December quarter against September ended quarter in FY14. Gross NPA increased by 9 basis points and stood at 5.73 % and its net NPA stood at 3.24% (increased by 33 basis points).

Price to book value of the company stands at 0.8x (approximately) in Q3FY14.