Bank Earnings Season (India Earnings) : State Bank puts provisioning past too

State Bank of India Logo (Photo credit: Wikipedia)

The Q3 results of the bank showed a limited increase in profits , standalone bank improving Net Income by 4% on last year while Net Interest income at INR 111.55 bln withstood the onslaught of a move of INR 220 bln in assets to Pension provisions making it a creditable performnce with PCR above 60% , very few banks have maintained the said high ratio as they have indiscriminately reduced provisioning to show profits.

SBI has cut provisions by just 15% or INR 3bln. Provisioning costs are high in Indian Banking already because o fnew regulations regarding restructuring assets requiring 2.75% for the first two years after which they can be declared standard assets again as per performance.

In Fee income Loan processing has grown by 27% at the cost of other heads including public business. Salary costs have increased in Superaannuation benefits ( the same pension provision corpus) NIMs are good and the bank deposits grew in double digits. to INR 11 trillion. Advances are more than 13 tln. Cons Profit is 46.48 bln and standalone profit at 34 bln both indicating the health required for the Indian banking sector even as deposit and Advance growth has slowed down in the Industry data available till December and an immediate breakout can be ruled out but the bank stock is likely to be resilient at 2200 levels eevn 2250 by the EDO and provide support to any bullish banknifty moves.

WPI earlier in the day came to within RBI’s March target of 6.62%

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