India’s top lender SBI posts lower first-quarter profits on investment book losses

The new logo of State Bank of India (SBI) is pictured on the podium at a news conference venue after SBI’s fourth quarter earnings announcement, in Kolkata, India May 19, 2017. REUTERS/ Rupak of Chowdhuri

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  • Net profit down 6.7%, beats forecasts
  • Company cites market value losses
  • Says expects to recoup those losses this year

MUMBAI, Aug 6 (Reuters) – State Bank of India (SBI.NS) missed its estimate on Saturday with a 6.7% drop in first-quarter net profit, hit by investment losses that the largest Indian lender said it expects to recover over the period. year.

During the quarter to June 30, the bank recorded losses of 65.49 billion rupees at market price (MTM).

This reduced SBI’s other income to 23.12 billion rupees from 118.02 billion a year earlier.

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“We will recoup most of the valuation losses in this year,” SBI Chairman Dinesh Khara told an earnings press conference.

“Based on the government securities yield of 7.30%, which was yesterday’s close, we can take back 19 billion rupees of MTM provision.”

Net profit fell to 60.68 billion rupees, well below the 78.19 billion expected by analysts, according to data from Refinitiv Eikon.

Gross bad debts as a percentage of total assets improved, falling to 3.91% from 3.97% in the prior quarter.

The bank does not foresee any asset quality challenges in the future, Khara said.

The SBI increased its domestic lending by 14.93% year-on-year, driven by strong growth in retail lending and it expects advances to grow at a similar pace throughout the year. ‘year.

Most Indian banks have seen a healthy increase in advances as economic activity rebounds from widespread COVID-19 restrictions.

Deposits rose 8.73%, down slightly from the March quarter.

($1 = 79.3600 Indian rupees)

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Reporting by Nupur Anand; Editing by Kim Coghill

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