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SBI’s Q3 PAT gains; slippages contained at Rs.10,000 cr

State Bank of India, the nation's largest lender, announced higher quarterly profit even as the proxy to the economy battled…

SBI’s Q3 PAT gains; slippages contained at Rs.10,000 cr

SBI(Getty Images)

State Bank of India, the nation's largest lender, announced higher quarterly profit even as the proxy to the economy battled to contain non performing assets and slowing credit growth.

State Bank said its third quarter profit rose to Rs.2,610 crore compared with Rs.1,115 crore in the year ago quarter. After tax earnings in Q3 were marginally ahead of the second quarter PAT and beat market expectations. SBI reported a third quarter Net Interest income of Rs.14,572 crore versus Rs.13,697 crore a year ago. 

The keenly watched figure of fresh slippages, which indicate more pain in the system were at Rs.10,185 crore, in line with street's estimates. Third quarter slippages were marginally below the Rs.10,341 crore clocked in the second quarter.

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The lender, which operates the largest network of branches in India, said gross non performing assets rose marginally to 7.23 per cent in the third quarter versus 7.14 per cent a quarter ago. In rupee terms they hit Rs.1.08 lakh crore during October-December in comparison with Rs.1.06 lakh crore in the second quarter. Net non performing assets stood at 61,430 crore, or 4.24 per cent, in the third quarter versus Rs.60,103 crore, or 4.19 per cent, in the second quarter.

The banking sector is facing multiple issues such as a slowing economy, near stagnant demand for credit mainly on account of demonetisation and rising non performing assets as a vast swathe of corporate India is saddled with unutilised capacity and tepid demand. On top of global headwinds in the form of falling exports are also affecting the banking sector's balance sheet.

The government and the Reserve Bank of India have nudged lenders to recognize and clean up their non performing assets over the past one year in a bid to kick start lending. However, fresh demand for capital has proved elusive in the economy.

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