SBI reported loss of $1.1 billion, the biggest ever in March quarter

New Delhi : Breaking news from share market reveals that the State Bank of India today ended up with 4 percent higher at Rs 254 on the Bombay Stock Exchange. Report claims that it has suffered a loss of Rs 7,718 crore ($1.1 billion), the biggest ever in the January-March quarter. Analysts believe that the loss for three months to March 31 is much higher than the expected loss of Rs 1, 285 crore, according to Thomson Reuters data. 

The country’s biggest lender set aside new provisions for bad loans after certain changes in banking regulation. In the December 2017, SBI had posted a loss of Rs 2,416 crore and its share prices rally after the results were announced. Shares rallied to close nearly 4 per cent higher after the bank said that it expects a key bad loan metric to fall roughly in two years.

Earlier, the management had hinted that the results of March quarter would be "very bad", so this was largely expected, said A K Prabhakar, head of research at IDBI Capital. "The worst is over for SBI."

Gross bad loans as a percentage of total loans soared high to 10.91 per cent from 10.35 per cent three months earlier and 6.90 per cent a year prior, the lender said in a statement. The Mumbai-based bank expects an annual growth rate for credit of 12 percent by 2020, and aims for a gross non-performing advances ratio of under 6 per cent by March 2020, Chairman Rajnish Kumar said.

In March quarter, SBI net interest income rose to Rs 19,974 crore, from Rs 18,688 crore in December quarter.

The strict rules announced by Reserve Bank of India (RBI) in February, did away with half a dozen loan restructuring schemes, have led to banks reporting a flow in bad loans in the March quarter, and several of them reporting losses. This situation has led SBI to keep aside provision for bad loans jumping to Rs 24,080 crore, from Rs 17,760 crore in December quarter.