Largest Indian bank's profit surges as loan provisions fall

Dhanlaxmi Bank had registered a loss of Rs131.60 crore for the fourth quarter of the previous fiscal

Net Profit of United Bank of India (UBI) at Rs.73.56 crore in Q4 FY17 showing increase of 14.76 pc over previous quarter from net loss of Rs.4l3 crores as of Q4 FYl6.

The company reported a loss of Rs 3,199.76 crore for the quarter ended March 31, 2017, nearly twice the net loss of Rs 1,735.81 crore it posted in the corresponding quarter previous year.

The public sector bank had registered a standalone net profit of Rs 1,263.81 crore in the same period a year ago.

The bank's NII for the quarter increased by 22 per cent QoQ to Rs 18071 crore in Q4FY17 as compared to Rs14751 crore in Q3FY17.

The lender said gross non-performing assets (NPAs) declined to 6.90 per cent of gross advances, down 33 basis points from 7.23 per cent reported for December quarter.

Net NPAs declined however from 3.81 per cent to 3.71 per cent during the same period. Provisions and contingencies decreased to Rs 1,430.16 crore from Rs 2,487.15 crore in the corresponding period of the previous financial year.

Shares of SBI rose as much as 4% on the BSE in intra-day trade on Friday, before ending at Rs 276.26, up 0.15%.

"The bank on a solo basis has done very well despite a hard quarter".

Bhattacharya said SBI had done well on a solo basis and the bank had chose to absorb the maximum pain arising out of the merger as a result of which the current quarter would be stressful.

According to her, the biggest thing that was done just after the quarter was merger of its five associates and Bhartiya Mahila Bank with it. Loan growth was at 7.92 percent for the year ended March 2017, with home and auto loans growth continuing to be strong.

Posting strong fourth quarter results for the last time as a standalone entity, SBI Chairman Arundhati Bhattacharya said, "In FY18, we will still see slightly elevated credit costs as the resolutions take place as we will need to make provisions upfront and though we have asked to spread out some provisions over a few quarters, that is still not available".

Adding that slippages are slowing down, she said the lender refreshed the watch list this year as compared to last year's list.

Under Basel III, the bank's capital adequacy ratio stood at 11.14 percent with the Tier-1 capital at 8.94 percent as on March 31 and its capital adequacy ratio as per Basel II was at 11.68 percent as on March 31.

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