SBI saw its net bad loans ratio spiking to 5.61 per cent of advances, from 4.24 per cent during the third quarter of 2017-18.
Shares of State Bank of India today slumped more than 3 per cent in morning trade on the bourses after the company reported weak third quarter earnings.
The SBI Group on February 9 reported a massive Rs 1,886.57 crore net loss for the December quarter of the current fiscal as its bad loans and provisions spiked. It had, in contrast, reported a net profit of Rs 2,152.14 crore for the October-December quarter of the last fiscal, 2016-17.
Reacting to the numbers, shares of the company opened at Rs 288 and slumped 3.85 per cent to touch an intra-day low of Rs 285 in morning trade on the BSE. Similar movement was seen on the NSE as well where the company opened at Rs 288.25, then fell to a low of Rs 285.15, registering a fall of 3.79 per cent over its previous closing price.
The nation's largest lender saw its net bad loans ratio spiking to 5.61 per cent of advances, from 4.24 per cent during the third quarter of 2017-18. The gross dud assets ratio jumped meanwhile from 7.23 per cent to cross the double digits mark at 10.35 per cent during the quarter under review.
The State Bank Group reported a "disappointing" set of numbers for the three months through December, logging in a net loss of Rs 1,886.57 crore after a massive under-reporting of dud assets in the past fiscal and reverses in treasury operations.
The bank had reported a net profit of Rs 2,152 crore in the same quarter last fiscal year. The bank hinted at more pains in the next quarter as the impaired assets issue and the lack of resolution continues, but said it hopes for a better fiscal 2019. On a standalone basis, the bank reported a wider loss at Rs 2,416 crore. "The current quarter is definitely disappointing, but going forward, there is a lot of optimism. From April, we will all start on a positive note. I don't want to sound very, very optimistic on the fourth quarter, neither very pessimistic," chairman Rajnish Kumar told reporters.
Over Rs 25,000 crore of loans slipped into the non- performing assets category in the reporting quarter, driven primarily by under-reporting of NPAs or divergence to the tune of Rs 23,330 crore for FY17. The gross NPA ratio crossed double digits at 10.35 per cent from 7.23 per cent a year ago. It can be noted that this is the first time the state-run behemoth has witnessed divergences, which was a common thread binding all the private sector banks. Kumar said 90 per cent of the divergences were already recognised as stressed assets, and recognising them as NPAs was only a question of "timing".A bulk Rs 10,000 crore of divergences were from the power sector and Kumar said further pain is in the offing, with the bank's high exposure to the sector.
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 "SBI slumps over 3% over weak Q3 earnings")
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