Top bank SBI fourth-quarter profit jumps but outlook clouded after units’ merger | Reuters
By Devidutta Tripathy | MUMBAI MUMBAI State Bank of India reported its highest profit in six quarters on lower provisions for bad loans last quarter, but investors were wary about the outlook for its asset quality after the amalgamation of its five subsidiary banks from April.SBI, which accounts for more than a fifth of India's banking assets, merged its five subsidiary banks with itself and also took over a niche lender to women from April 1, in the sector's first consolidation move.The bank on Friday reported standalone net profit, not including contributions from subsidiaries, more than doubled from a year earlier to 28.15 billion rupees ($433.5 million) for its fiscal fourth quarter to March 31. While the profit surge was in line with expectations, SBI surprised the market with lowering of its bad-loan ratio on a quarter-on-quarter basis.However, including the results of the subsidiary banks it has now taken over, the bank reported a consolidated net loss of about 33 billion rupees in the March quarter, stoking concerns that higher bad-loan ratio at the subsidiaries could weigh on the overall balance sheet.It also guided for a jump in a "watch list" of potential trouble loans to 324.27 billion rupees to account for the consolidated entity beginning April 1, compared with 133 billion rupees for the parent bank. SBI Chairman Arundhati Bhattacharya told a news conference that the bank had already taken the "maximum amount of pain" regarding the merger of the subsidiaries and made complete provisions wherever required, although she expected overall provisioning costs to remain "elevated" in the year to March 2018."The near term, there might still be a little more pain ...
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