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SBI Q3 earnings today: 4 things to watch out for

10 February 2018

State Bank of India, the nation's biggest lender by assets, reported a surprise loss of 24.16 billion rupees ($375.10 million) for the three months ended December.

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 of Rs 23,330 crore for the previous fiscal.

State Bank of India (SBI) unloaded two bits of bad news after market hours on Friday: An unexpected first quarterly net loss in at least 17 years and significant divergences in provisioning compared to the Reserve Bank of India's assessment. Over Rs 6,000 crore in provisions was due to the divergences.

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Its watchlist accounts has now come down to Rs 10,400 crore, and Kumar asserted that there is no "chunky" asset that can slip into NPAs now. During the quarter, as bond yields straightened, SBI booked a treasury loss of Rs 3,260 crore, dragging down the overall treasury revenue by 8.7 per cent at Rs 20,091.3 crore compared to Rs 22,000.2 crore in the previous quarter.

Total deposits of the bank stood at Rs 5.73 lakh crore as on December 31, 2017 against Rs 5.89 lakh crore at the end of December 2016.

During the quarter, the central government has infused Rs 1,375 crore by way of preferential allotment of equity shares. The growth in retail loans stood at 13.59%, and that in agricultural loans at 5.88%.

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Loan growth: After a period of sluggishness, system loan growth has started reviving and touched the 10% mark in December.

On the operations side, the core net interest income grew 5.17% to Rs 18,688 crore on a sequentially higher net interest margin of 2.45 per cent, while the other income plummeted 29.75% to Rs 8,084 crore on account of treasury operations.

SBI Chairman Rajnish Kumar, who took the helm in October, said bad loan additions were peaking.

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SBI Q3 earnings today: 4 things to watch out for