SBI stock trading lower as bad loans rise in Q3

BoI posts Rs 2,341-cr loss in Q3 on higher provisions

BoI posts Rs 2,341-cr loss in Q3 on higher provisions

Chennai, Feb 12 The public sector Indian Bank today reported a decline of 18.8 per cent in net profits at Rs 303.06 crore for the third quarter ending December 31, 2017 due to higher operating expenses and provisioning.

During same period of previous fiscal, the bank had registered a net profit of Rs 64.10 crore.

On the other hand, provisions for NPA increased by 71.74% to Rs 4,373.06 crore in Q3FY18 versus provisions of Rs 2,546.20 crore a year ago the same period.

Net interest margin (NIM) - a key measure of profitability - fell 33 bps y-o-y and 27 bps sequentially to 1.88 per cent in Q3. In 2013-14, state-owned banks wrote off bad loans worth Rs 34,409 crore; Rs 49,018 crore in 2014-15; Rs 57,585 crore in 2015-16 and hitting Rs 81,683 in the fiscal ended 31 March 2017.

Out of the ₹14,057 crore, ₹9,405 crore is lending against Stand by Letter of Credit (SBLC) issued by other banks, Bank of India said.

Net interest income was down for the quarter at Rs 347.94 crore, as against Rs 360.98 crore. Corporation Bank also reported on Monday a loss of Rs 1,240 crore, as against a profit of Rs 159 crore in the year-ago period.

BOI stated that the bank made provision of Rs 549.29 crore as of December 2017, for the first list of wilful defaulters identified by RBI on June 23, 2017 for Insolvency & Bankruptcy Code (IBC) Act. Advances were up at Rs68,250 crore in third quarter this fiscal from Rs67,866 crore.

In all, it has to make Rs 394.13 crore of additional provisioning, of which Rs 262.75 crore is to be provided for during 2017-18.

The stock is up 3.6% or 9.9 points during the last one year.

The advance portfolio has expanded by about Rs384 crore mainly due to growth in MSME advance by 17.70% and growth in housing loan and auto loan segment by 23.63% and 31.31%, respectively.

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