The largest lender of the country, State Bank of India has posted a 46% dip in its net profits for the first quarter of this fiscal. The bank has booked profits worth Rs 1584 crore as compared to Rs 2914 crore posted for the same period in the fiscal prior to this.
Although there has been a rise in the net interest income (NII) for the bank to Rs 9700 crore, a 32% increase over previous figures as well a 18% rise in its operating profit, overall decline in profits was attributed to the high provisioning for non performing assets (NPAs).
The bank has clocked its net interest margin (NIM) at 3.62%.
"I had at the beginning of this fiscal given an NIM guidance of 3.5 per cent. We have done better at 3.62 per cent in the first quarter. Now that we have hiked our base rate to 10 per cent, I am tempted to raise my NIM guidance for the fiscal to 3.6 per cent," Mr Pratip Chaudhuri, Chairman of SBI said.
Strict directives set by regulator Reserve Bank of Indian on provisioning requirements for doubtful assets as well as NPAs has led to heavy provisioning worth Rs 995 crore to be done by SBI, showing direct impact on its bottom line.