After a season of low profits from correctional provisioning, this quarter’s growth in provisions to INR 29.2 bln
(21.6 bln Sep 10) or $0.55 bln was more easily absorbed as NII from loans jumped to INR 104 bln or $2.06 bln at the new extreme dollar rates. 22% jump on the Gross NPAs and 46% on Net NPAs being still a pressure on growth. Last year in September they had scored 81.14 bln in NII and Net NPAs were still high because of the bank’s customer profile at 1.70%, the growth to 2.04% in line with the sector’s results
The Credit Deposit (Advance / Deposit Ratio) ratio is up to 75.6% from below 75% while Deposits are more than $200 bln at INR 9.73 tln Provisions for 6 months including the counter cyclical buffer till Q1 are as high as the quarter’s NII at INR 103 bln
Thus the PaT is a good INR 2810 Crs or $560 mln a growth in double digits over last year September. Now SBI has stepped into a negative spiral of sentiment on the sector Moody’s choosing this time to derate the Indian banking sector even though it is insulated from global harakiri in the sector (apparently as indian corporate encourage limited ratings business) The sectoral rating by Moody’s as the downgrade on the Standalone Financial Strength rating to D+ earlier do not affect any credit offerings of the banks, incl PSU ECBs and Infra Bonds by the InfraCos
The market could have expected a 30% grow back in profits but that does seem unlikely from here Fee Income is apparently flat from last year as expected. According to reports, NPAs start climbing down in the second half of the year as Pratip Chaudhary had recommended / guided since the wipeout in March 2011 Grodss NPAs at 4% however mean the bank will be held to close scrutiny from here
A loan growth of 15% on its loan book of INR 8 tln means a significant fold on its own size of the bank esp as CASA keeps pace and Deposits grow faster ahead of the rate deregulation this quarter
A loan growth of 15% on its loan book of INR 8 tln means a significant fold on its own size of the bank esp as CASA keeps pace and Deposits grow faster ahead of the rate deregulation this quarter Loan Demand has seen improvement in the festive season and continues in November. SME loans continue to grow higher at 20.7%. Iron & steel , Metals and Mining and Textiles continue to be the largest NPA creators
Basel 1/2 CAR for the bank is already down to 11% compared to 16% for othrers, while CASA remains good at 47.6% Restructuring was 1100 crs or INR 11 bln and slippages (new) 5.06 bln Gross NPAs have improved to 1.95% from over 2% in last year Q2. The PCR is over 63.6%
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