SBI reports Rs2,416 crore loss owing to bad loans

State Bank of India (SBI), India’s biggest lender by assets, on Friday reported a net loss of Rs2,416 crore for the fiscal third quarter after setting aside funds to cover rising bad loans and losses on its bond portfolio.

It had reported a net profit of Rs1,582 crore in the September quarter.

This was the lender’s first quarter under the chairmanship of Rajnish Kumar, who took over in October.

The rise in bad loans was because of a Reserve Bank of India (RBI) review which revealed a divergence in reporting of gross NPAs based on fiscal 2017 results. Such divergence—the difference between RBI’s assessment and that reported by the lender—was around Rs23,239 crore at the end of March 2017.

Of the divergence, loans worth Rs2,835 had already been recognized as NPAs in the June quarter, while Rs4,338 crore was upgraded to standard category later. The remaining amount was tagged as bad loans in the three months ending December. Accordingly, total slippages rose to Rs25,836 crore, compared with Rs9,026 crore in July-September.

Gross NPAs as a percentage of total loans stood at 10.35% as on 31 December, up from 9.83% reported in the previous quarter.