State Bank of India first-quarter profit misses estimates on tax expense

Madiha Shakeel August 2, 2019

BENGALURU: State Bank of India (SBI) on Friday reported a smaller-than-expected profit of 23.12 billion rupees ($332.15 million) for the first quarter, hit by a tax expense even as bad loan provisions fell.

That stood against a loss of 48.76 billion rupees reported last year due to lower trading income and treasury losses. For the quarter June 30, 2019, analysts had expected a profit of 40.83 billion rupees, according to Refinitiv data.

SBI recorded a tax expense of 17.51 billion rupees for the quarter, compared to a tax gain of 23.79 billion rupees last year. Before taxes, the bank earned 40.63 billion rupees in profits.

The results also come at a time when other major lenders including HDFC Bank Ltd and ICICI Bank Ltd have warned of the negative impact of India’s ongoing economic slowdown on their performance.

Shares of SBI were volatile after the results, and were last up 0.8% at 0839 GMT.

Asset quality, an issue that has pestered Indian lenders for years as bad loans surged, was stable at SBI, with gross non-performing assets as a percentage of total loans standing at 7.53% at June-end, flat over the previous quarter and lower than  10.69% in the same period last year.

Interest earned rose 6.5% to 626.38 billion rupees, while provisions for bad loans dived 10.7% in the quarter.

Copyright Reuters, 2019

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