SBI slides 4% after first quarterly earnings loss in 17 years

Indian Bank stock traded 5.83% up at Rs359.15 on BSE on Monday

The State Bank of India stock fell in opening trade after the lender reported a massive Rs 2,416.37 crore net loss for the December quarter of current fiscal as its bad loans and provisions spiked.

For the nine month period ending December 31, 2017 total income of the bank surged to Rs 14,565.27 crore from Rs 13,649.22 crore registered during year ago period.

On the other hand, provisions for NPA increased by 71.74% to Rs 4,373.06 crore in Q3FY18 versus provisions of Rs 2,546.20 crore a year ago the same period. Instead, the bank declared a loss of Rs 2,420 crore.

The banking sector has reported a collective loss of over Rs 4,200 crore for the quarter ended December 2017 as large losses reported by public sector banks have completely wiped out profits earned by large private banks.

The Kolkata-headquartered United Bank of India said it has provided Rs 167.44 crore for bad loans under insolvency process during this quarter against seven accounts. Advances were up at Rs68,250 crore in third quarter this fiscal from Rs67,866 crore. The bank's provisions for non-performing assets rose 95 per cent to Rs 964.07 crore as against Rs 494.52 crore.

In all, it has to make Rs 394.13 crore of additional provisioning, of which Rs 262.75 crore is to be provided for during 2017-18.

On the capital adequacy ratio, Kharat said it was 12.44 per cent as on December 31, 2017.

Net interest income was down for the quarter at Rs 347.94 crore, as against Rs 360.98 crore.

Divergence was also seen in net NPA to Rs 9,707 crore as of March 2017.

"We have marginally modified our legacy estimates for FY18/FY19 and retained Buy rating on SBI, decreasing our target price to Rs 364 (from Rs 386 earlier), valuing the stock at 1.4x FY20E P/ABV and Rs 65 for subsidiaries", the brokerage said.

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