Hope basic expenses of merger will be behind us, says SBI Chairman

Kolkata: India's largest public sector lender State Bank of India (SBI), which posted a net profit of Rs 2,815 crore in the last quarter of 2016-17, expects the basic expenses of merger of its associates with it would be behind now, its Chairman Arundhati Bhattacharya said here on Friday.

"In respect to merger of associates, we have ensured that we have taken maximum amount of pain so that going forward we can give much better results.

"Towards that end, the entire corporate book has been fully aligned...not only that even VRS expenses that come during this quarter to the extent of 75 per cent of estimated expenses, that have already provided for," she said.

"Going forward, I do not feel we would require anything more than Rs 100-200 crore in order to take care of these expenses. With that, the basic expenses of merger will be behind us and from the next quarter, we intend to start with a clean slate," she added.

Bhattacharya said the lender has just been through a "difficult but satisfying quarter".

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.

The SBI on Friday reported a 122.72 per cent increase in its net profit to Rs 2,815 crore in the last quarter of 2016-17 as against Rs 1,264 crore in the same period in 2016.

Total income in the quarter under review was at Rs 57,720.07 crore, up 7.8 per cent from Rs 53,526.97 crore in the corresponding period of the previous fiscal, it said in a regulatory filing.

Net interest income rose by 17.33 per cent to Rs 18,071 crore in the last quarter from Rs 15,401 crore in the corresponding period of previous fiscal, while operating profit increased by 12.93 per cent to Rs 16,026 crore from Rs 14,192 crore in corresponding period of previous fiscal.

Deposits of the bank increased to Rs 20,44,751 crore as on March 17, up by 18.14 per cent over last year's Rs 17,30,722 crore, it said in a statement.

Gross advances increased by 7.8 per cent from Rs 15,09,500 crore as on March 16 last year to Rs 16,27,273 crore as on March 17 this year.

Large corporate advances rose 3.59 per cent from Rs 3,30,136 crore as in March of previous fiscal to Rs 3,41,990 crore as in last March.

SBI also said its gross non-performing assets (NPAs) increased to Rs 1,12,343 crore as on March 31, from Rs 98,113 crore in last year, while gross NPA ratio stood at 6.9 per cent in March 2017.

On NPA assets, Bhattacharya said the NCLT is open to the bank. "The entire operation in NCLT is now begening to gather more pace. Either through NCLT or RBI route, we will find some way in order to take these accounts forward and resolve them," she said.

On the bank's exposure in the sectors which have been flat, she said: "I will not say we stop exposure all together. If the sector is weak, definitely this is something we will do after looking large number of times and to the extent possible, we will not be taking exposure of those sector."

Adding that slippages are slowing down, she said the lender refreshed the watch list this year as compared to last year's list. "Out of around Rs 32,000 crore of watch list that we have given, Rs 9,800 crore pertains to associate banks."

The SBI has reduced loan loss provisions by 9.44 per cent to Rs 10,993 crore in the quarter as compared to Rs 12,139 crore in the same period last year.

Bhattacharya said in the current fiscal, credit costs are not about to come down but in 2018-19, they should definitely be much better.

Return on assets declined by five basis points to 0.41 per cent in March 2017, from 0.46 per cent last year.