No turnaround at SBI: NPA divergences lead to net loss of Rs 6,968 crore in FY19

Other lenders that reported sharp divergences include Union Bank of India, Indian Bank, Bank of India, Indian Overseas Bank, Central Bank of India, while Yes Bank and Lakshmi Vilas Bank are among private lenders.

State Bank of India (SBI) said on Tuesday it posted a staggering loss of Rs 6,968 crore in FY19 and not a net profit of Rs 862 crore as it had reported earlier. The lender said the Reserve Bank of India had spotted a large divergence of Rs 11,932 crore in its gross non-performing assets.

The revised gross NPA stood at Rs 1.84 lakh crore against the bank’s earlier reported figure of Rs 1.72 lakh crore. The divergence in provisioning for FY19 came in at Rs 12,036 crore.

At the end of FY19, SBI had said its balance sheet had been fully repaired with a turnaround in Q4FY19. SBI’s chairman Rajnish Kumar after the September quarter numbers said, “There is a baseline scenario for the bank and then there are exceptions. If you look at the baseline scenario, the gross slippages in NPA are in the range of Rs 32,000-33,000 crore, which is normal. If baseline is Rs 32,000 crore or Rs 34,000 crore for the bank, which is 1.6% of our current loan book and then there are slippages of different kind for which we should have provision.”

Other lenders that reported sharp divergences include Union Bank of India, Indian Bank, Bank of India, Indian Overseas Bank, Central Bank of India, while Yes Bank and Lakshmi Vilas Bank are among private lenders. Among the nine banks that have reported their divergences so far, Yes Bank had the highest divergence as a share of gross NPAs assessed by the RBI at 29.4% (Rs 3,277 crore), followed by Central Bank of India at 7.35%.

Following a recent directive by the Securities and Exchanges Board of India (Sebi), listed banks are required to make disclosures of divergences and provisioning beyond specified threshold not later than 24 hours upon receipt of the RBI’s Final Risk Assessment Report rather than waiting to publish them as part of annual financial statements.

In a statement to the exchanges, SBI said that following subsequent slippages and upgradation over the first two quarters, the remaining impact on gross NPAs during Q3FY20 stood at Rs 3,143 crore. After subsequent provisions and upgradations of NPAs during the current fiscal, the remaining impact of the net NPAs during Q3FY20 would be Rs 687 crore, while the remaining impact of provision during Q3FY20 is Rs 4,654 crore. During the September quarter, the public sector lender had reported a three-fold jump in its net profit at Rs 3,102 crore against Rs 945 crore a year ago.