BETTER asset quality and a 100 bps dip in credit cost helped the largest lender State Bank of India (SBI) on Friday report a net income of Rs 838 crore for the March quarter as against a net loss of Rs 7,718 crore a year ago, and also guide towards sunnier days. For the full year to March, SBI, which controls a fourth of the nation’s banking system, booked a net income of Rs 862 crore as against a net loss of Rs 6,547 crore. The management attributed lower profit to 100 per cent provisions made for some key stressed accounts which are near the full resolution.
“The bank has delivered an excellent performance on all parameters. The turnaround has happened. The improvement in asset quality is visible. Both the gross bad loans and net dud assets ratios are substantially down,” Chairman Rajnish Kumar told reporters. The credit cost improved by a full 100 bps to 2.66 per cent from 3.62 per cent a year-ago and for fresh slippages the credit cost was 0.52 per cent, he said. Guiding towards sunnier days, Kumar said, “we have not left anything for the future. The remaining legacy credit cost will be done by March 2020 and from next April there will be no legacy cost as far as our corporate book is concerned,” Kumar beamed.
He said bank was expecting better performance in first quarter of current financial year and had set a credit growth targeting of 10-12 per cent for FY20.