MUMBAI: State Bank of India (SBI) , the country's top lender by assets, reported on Friday its fourth-quarter profit tumbled a worse-than-expected 66 percent due to sharply higher provisions for bad loans as India's banks respond to a central bank order to clean up their books.
SBI said in a statement its bad loan provisions more than doubled from a year earlier to 121.39 billion rupees ($1.81 billion), squeezing net profit to 12.64 billion rupees for quarter ended March 31 from 37.42 billion rupees a year ago.
Analysts on average had expected a net profit of 19.17 billion rupees, according to data compiled by Thomson Reuters.
So far, a dozen Indian state-run lenders have reported combined losses of more than $3 billion after the Indian central bank ordered them to tackle bad loans. Reserve Bank of India chief Raghuram Rajan has set a March 2017 deadline for cleaning up bank balance sheets.
SBI, which accounts for nearly a quarter of India's loans and deposits, also saw its gross bad loans as a percentage of total loans rose to 6.5 percent in March from 5.1 percent in December.
Loans grew 13 percent in the 12 months to March 31, the bank said. Its domestic net interest margin declined to 3.27 percent in March from 3.54 percent a year earlier.
SBI shares were trading 0.3 percent lower by 0804 GMT in a Mumbai market that was up 0.88 percent. The stock had risen as much as 3.4 percent after the results were published.
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