MUMBAI (Reuters) – The State Bank of India missed estimates on Saturday with a 6.7% drop in first-quarter net profit, hit by investment losses that India’s biggest lender said it expected recover during the year.
During the quarter to June 30, the bank recorded losses of 65.49 billion rupees at market price (MTM).
This reduced SBI’s other income to 23.12 billion rupees from 118.02 billion a year earlier.
“We will recoup most of the valuation losses in this year,” SBI Chairman Dinesh Khara told an earnings press conference.
“Based on the government securities yield of 7.30%, which was yesterday’s close, we can take back 19 billion rupees of MTM provision.”
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Net profit fell to 60.68 billion rupees, well below the 78.19 billion expected by analysts, according to data from Refinitiv Eikon.
Gross bad debts as a percentage of total assets improved, falling to 3.91% from 3.97% in the prior quarter.
The bank does not foresee any asset quality challenges in the future, Khara said.
The SBI increased its domestic lending by 14.93% year-on-year, driven by strong growth in retail lending and it expects advances to grow at a similar pace throughout the year.
Most Indian banks have seen a healthy increase in advances as economic activity rebounds from widespread COVID-19 restrictions.
Deposits rose 8.73%, down slightly from the March quarter.