India Bank Earnings 4Q2014: SBI dresses up battle wounds for a smart total

To be fair to the largest Indian Bank they did grow NII 16% in the quarter and Net Income was better than INR30 Bln beating expectations on profit and also growing other income after a long impasse to INR 65 Bln from INR 50 Bln However, the near 30% improvement in Net NPAs and Gross NPAs to under 2.6% and under 5% was actually more through sell downs of written off assets. INR 56.94 Bln worth of write offs reduced NPLs while INR30.5 Bln in real recoveries and another INR 50 Bln in upgrades of doubtful assets helped the bank screen out new fall throughs to NPA of INR 79 Bln, smaller than the last quarter’s slippages of INR 110 Bln but not really good for the course.

However, the street celebrated the profit numbers on the closing session of the week, the bank ready to post better results as it continues at 27% market share of mortgages and 16% of Deposits market share as the Largest and No 1 in key retail markets in the country operating over 135,000 (135,863) automated kiosks

The Bank also continued to improve Net interest margins and scored on operating efficieny with cost control as it set in moton a large scale review process at the branch level to map villages and individual SME loans of smaller value.

One expects the INR 57 Bln in write offs to be paid in by ARCIL and thus recoveries down the  line will continue to be a robust writeback to Net Income

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