New RBI rules on bad loans cause SBI to post worst quarterly loss at Rs 7718 crore

New RBI rules on bad loans cause SBI to post worst quarterly loss at Rs 7718 crore
Highlights

Gross bad loans as a percentage of total loans in the fourth quarter rose to 10.91% from 10.35% three months earlier and 6.90% a year prior, SBI said.

Gross bad loans as a percentage of total loans in the fourth quarter rose to 10.91% from 10.35% three months earlier and 6.90% a year prior, SBI said.

State Bank of India (SBI) reported its deepest-ever quarterly loss on Tuesday, far beyond analyst estimates, as the country’s biggest lender set aside more provisions for bad loans after a change in banking regulation.

Net loss for the three months ended March 31 was Rs 7718 crore $1.13 billion), versus an average Rs 1285 crore loss from 16 analyst estimates complied by Thomson Reuters. The result also compared with a restated net loss of Rs 3442 crore in the same period a year earlier.

Banks saw soured loans and provisions surge in the quarter after the Reserve Bank of India (RBI) in February eliminated half a dozen loan restructuring schemes to hasten the clean-up of near-record levels of bad debt. Most state-run banks that have reported quarterly earnings so far have posted losses.

SBI’s bad-loan provisions for the quarter more than doubled from a year earlier to Rs 28096 crore. Gross bad loans as a percentage of total loans rose to 10.91% from 10.35% three months earlier and 6.90% a year prior, the lender said in a statement.

Net interest income for the quarter fell 5.2% to Rs19974 crore.

Shares of the lender rose as much as 6.2% after the results, when the BSE Sensex was 0.1% higher.

SBI shares were trading 5.2% up at Rs 257.85 on BSE in afternoon trade.

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